The market is digesting much higher than expected CPI numbers Wednesday morning. Some of the readings are the highest in many years, but they are not a huge surprise as they are driven, to some degree, but the reopening of the economy and a return to normal.
The big issue with inflation is whether the spike is just temporary or "transitory," as the Fed keeps saying, as the economy returns to where it was before the COVID pandemic, or are there structural changes that will be a problem for the Fed with its massive balance sheet of debt? We are going to hear much debate on this issue in the months ahead, and currently, the market doesn't seem to be certain what it believes.
Unfortunately, the inflation issue puts the market focus on macro issues, and that undermines stock-picking where fundamentals and technical patterns matter. Some of the rotation Tuesday that favored growth names and other laggards has reversed back down Wednesday, but there doesn't seem to be much selling energy.
Stocks are mostly drifting around, and there are few pockets of momentum other than a couple of growth names moving on earnings. I see little to do right now and am just staying patient until I see a better edge.
It is a good market not to be in a hurry to force trades.