The market is moving around rather randomly this morning as it digests the CPI report. The headline number came in a little hot, but the core number was inline. The market is now trying to figure out to what degree the inflation concerns are already discounted.
Interestingly the 20+ Year Treasury Bond Fund (TLT) is trading quite strong, which indicates that the inflation concerns are under control. The bond market is often viewed as being smarter than equities when it comes to interest rates, so that is notable. Don't forget we have Fed minutes this afternoon that may cause more reflection on the inflation issue, but for now the issue is going to simmer for a while and won't be an immediate market driver.
Under the surface, we have better action in big-cap technology and FATMAAN names. These names are generally more sensitive to interest rates, so the relative strength there is a positive.
Breadth is running about 3600 gainers to 4200 decliners, and the pockets of momentum are narrow. Many of the smaller names that I like are drifting around, but the charts are still developing fairly well.
A new position I started this morning is Redwire Corp (RDW) which is space-related and has some of the better numbers in the sector. I'll discuss this more fully in a future post.
The charts of the senior indices still look poor, but a strong close today would help matters. We are primarily in the middle of a trading range right now, and there isn't much clarity.