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ETF Tracker Newsletter For April 9, 2021

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LEAPING INTO THE CLOSE

[Chart courtesy of MarketWatch.com]

  1. Moving the markets

A last hour ramp pulled the major indexes out their sideways pattern and pushed them into a solid green close.

For a change, the Dow led the pack by scoring another record high with the Nasdaq only in 3rd place, while SmallCaps rose moderately.  

In economic data, and after an unprecedented delay, the BLS finally disclosed a huge jump in March Producer Prices, up 1% MoM vs an expected 0.5%. Far worse was the YoY number, which amounted to a stunning rise of 4.2% vs. 3.8% expected. As ZH pointed out, this is the 11th month in a row of rising PPI.

Inflation keeps heating up, and I believe it will accelerate, while the Fed has not acknowledged any of it, but they will have to once it is passed on to consumers.

We’ll need to wait till next week to see if the next CPI reading is already signaling this process. However, the CPI is a number that does not truly reflect price increases for everyday items.  

The 10-year bond yield rose slightly to the 1.65% level, while the US Dollar bounced off yesterday’s lows, keeping Gold in check with the precious metal slipping -0.84%.

Hope reigns supreme that the markets can handle inflation and rising bond yields, as the chief investment officer at Raymond James noted:

Contrary to headlines, rising interest rates, healthy levels of inflation, and an eventual Fed rate hike are not necessarily market negatives.

That is until inflation rears its ugly head, a result of reckless money printing, and the bond market starts to puke as yields roar.  

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