Soft inflation numbers are causing a number of reactions this morning. Bonds are stronger as interest rates pull back, the dollar is seeing its biggest drop in weeks and precious metals are bouncing. In addition, oil is finally taking a rest after the recent frenzy.
The soft CPI numbers are also giving equities a boost. Things were looking flat until the CPI report hit and that nudged the buyers back into action.
Breadth is strong at better than 2 to 1 positive but new highs are only around 200 which illustrates how far the indices still are from their January highs. Momentum players are not chasing to the degree that they did back in January. The FAANG names are frisky and that positive sentiment is spilling over to the broader market.
I'm not as heavily long as I would like to be and am trying to avoid the landmines produced by earnings reports from smaller stocks. Most of the big cap names have reported but there are still plenty of reports from smaller caps that can sneak up on you if you aren't careful.
One names that will post earnings on May 17 that has been my Stock of the Week previously is Baozun (BZUN) . I added some today and am looking for a breakout move. I also started a position in Everspin Technologies (MRAM) which posted a very strong report and is trading strongly. Turtle Beach (HEAR) which I have mentioned several times had a blowout report due to the popularity of its headphones for the "FortNight" video game that is extremely population. I am out of that one now but will be long for reentries as it develops.
We'll see if the bulls can keep it running as oil and the dollar fade. I'm not inclined to do much chasing and will be cautious very fast if we have a weak close today.