What's Eating the Market Today?

In this morning's note I noted the following (allow me to highlight [in case you're wondering] what seems to be troubling the stock market this session):

"You see, the market these days sees things in a very narrow time window. And, surely, if "it" looks out just to mid-year, it fully well knows that, say, March-on, year-on-year inflation prints should come notably off the boil.

For example, last January CPI was up 1.4%, by March it was up 2.6%, by April 4.2%, by May 5.0% and by June 5.4%. So, barring an even huger ramp up in the rate of price increases than we've seen of late, headline CPI is set to moderate going forward.

And, one might expect, barring oodles of other risks -- geopolitics, mid-term election angst, the Fed tightening policy (and tighten they will [till they crack the markets]) amid weakening data, crazy high tech-sector valuations, and so on -- hitting the tape, that stocks will have a decent go of it as the reported inflation numbers abate a bit.

That said, one should in no way take those oodles of other risks the least bit lightly!"

At least one Fed governor found himself alarmed enough by this morning's inflation data to rattle markets with a call to do more, sooner, than, clearly, the equity market has priced in.

I'd instruct both short-term bulls and bears to not hold their breath right here (this market is bound to remain uber volatile, in both directions). I'd instruct portfolio managers to actively manage the risk of something potentially big to the downside going forward...