stock market yield inflation rising

The Stock Market’s Moment Of Truth Comes Tomorrow


The Stock Market’s Moment Of Truth Comes Tomorrow

The market continues to climb, now on a three-day winning streak. It is likely that we could continue to see prices rise over the near-term. The big news will come tomorrow when the CPI report comes out. Investors are expecting an increase of 2.0 percent vs. the same period a year ago, while CPI less food and energy is expected to rise by 1.7 percent.

Mott Capital Management, Michael Kramer

Mott Capital’s Reading The Markets

An In-depth Global Macro Premium Stock Market Commentary

In Video Format- See How Michael Dissects The Markets

Premium Subscription Based Membership

Just $200 Per Year – Get Your Free 2 Week Trial

Stock Price Continue To Rebound, More To Come?

Join our 571 Daily Subscribers And Get This FREE Commentary In Your E-Mail! 


How will stocks react? It is some ways the moment of truth for the stock markets, right? Everyone seems so convinced the markets free fall last week was driven by rates on the 10-year suddenly rising over the past week, and that hot 2.9 percent y/y change in wages. Right?


So, if inflation comes in hot tomorrow, shouldn’t the market fall? One would think so, of course, that would be if the rising yields were actually the reason for the sharp declines last week. Just look at the sharp rise in rates, all last week. They started February 1 at 2.85 percent, and have risen all the way 2.85 percent today. Oh wait, they didn’t rise at all now did they?




But inflation, that is creeping into the system, just look at surging gold and Oil prices? On February 1, Oil stood at $66 per barrel, and it has  DROPPED all the way $58.75, a decline of 11 percent. Meanwhile, Gold the mighty hedge against inflation and safe harbor in the eye of the storm stood at $1,345 and today $1,329. So much for the that.

But the dollar…. Forget it!

What’s The Best Hedge Against Inflation? Stocks!

What I find so surprising in all of this, is that stocks are the best hedge against inflation! Stocks! Look a the returns of the S&P 500, Consumer Price Index and Gold since the late 1970’s.  It is not even close!

US Consumer Price Index Chart

US Consumer Price Index data by YCharts

But of course, the best outcome would be strong inflation reading on the CPI, causing yields to rise, and a rising stock market. Why? Because finally, everyone will have to concede that the market didn’t go down on increasing rates or inflation, last week. The stock market fell because it was merely overbought and because of some alleged shady business.

Watch the latest Reading The Markets exclusive content, where I show you all the indicators I am currently watching, and why the market is likely to rebound, with a one time purchase for $4.99.


Mott Capital’s Reading The Markets – An In-depth Global Macro Stock Market Commentary – In Video Format – See How Michael Dissects The Markets

Just $200 Per Year – Get Your Free 2 Week Trial

Recent Videos:

Stock Price Continue To Rebound, More To Come?

Stock Market Bouncing Back

A Line Drawn In The Sand?

Searching For The Market Bottom

We May Have Just Hit Bottom

Machines Gone Wild

Don’t Freak Out About Friday’s Sell-Off

How The “Street” Got Apple So Wrong

Free Articles Written By Mike:

Why McDonald’s Oversold Stock Still Looks Expensive

3 Biotech Stocks Facing Steep Declines Ahead

Broadcom’s Bid For Qualcomm Will Fail, Traders Indicate

Tesla Analysts See Soaring Sales Amid Investor Skepticism

Cisco Traders See Stock Rebound Despite Weak Growth

4 Chipmakers Rising During the Stock Market Sell-Off

Why Alphabet’s Recent Declines Creates Opportunity

Why Netflix May Fall 10%, Setting Up Longer-Term Rise

Nvidia’s Short-Term Volatility Could Bring Long-Term Gains

Join our 571 Daily Subscribers And Get This Commentary In Your E-Mail! Subscribe


[vc_tweetmeme type=”follow” follow_user=”michaelmottcm” show_followers_count=”true” large_button=”true”]

Photo Credit Via Flickr


Mott Capital Management, LLC is a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Upon request, the advisor will provide a list of all recommendations made during the past twelve months. Past performance is not indicative of future.

© 2018 Mott Capital Management, LLC.  Use, publication or reproduction in any media prohibited without the permission of the copyright holder.

Tags: #sp500 #yields #inflation #hedge #gold #oil #stocks