Friends

Both yesterday’s CPI data and today’s PPI data were hotter than expected. Yesterday, bonds did sell off, but they rallied today. Stocks didn’t seem bothered by the data at all. The market averages all moved higher as if they have no concern at all about inflation pressures in the economy. The odds of any Fed Funds rate cuts dropped to the point where analysts might be surprised if there are any cuts at all this year.

Maybe in the coming days and weeks we’ll see more of a reaction to this week’s data but for now stocks continue to move higher. For the day, the Dow Jones Industrial Average was up 342 points to close at 44,711. The S&P 500 was up 63 points to finish the day at 6,115. The Nasdaq Composite Index was up 295 points to close at 19,945. Gold was up $28 to trade at $2,957 per ounce, while oil was up $.06 to trade at $71.43 per barrel WTI.

I admit that I am surprised that the markets took this week’s inflation data so well. The good news for the bulls is that we are seeing a broadening out of participation as more than just a handful of stocks are pushing the market averages higher. Let’s see how the week finishes out tomorrow.

Have a nice evening everyone.

Jim