Thursday, May 12, 2022

Morning Note: Be Patient, But Only When.........

So, while yesterday's release of the May CPI number came in hotter than the equity market (actors in the aggregate) had hoped, and than economists had forecast, this morning's PPI (Producer Price Index), came in on the nose of consensus expectations (up 0.5% month-over-month versus 1.4% the previous month). In terms of market reaction, zilch! S&P 500 futures were down 0.85% coming into the number, they're down 0.76% as I type (2 minutes ahead of the open).

For this morning's note I'll just jump to the numbers right here, then jump on the charts and shoot a quick video and get that out to you shortly... We'll get into the macro weeds in tomorrow's economic update.

Asia was ugly overnight, with 15 of the 16 markets we track closing lower.

Same for Europe so far this morning, with all of the 19 bourses we follow trading down as I type.

US stocks continue to take it on the chin: Dow down 324 points (1.02%), SP500 down 1.25%, SP500 Equal Weight down 0.59%, Nasdaq 100 down 1.61%, Nasdaq Comp down 1.46%, Russell 2000 down 0.41%.

The VIX sits at 34.00, down 4.42%.

Oil futures are down 0.05%, gold's down 0.36%, silver's down 2.11%, copper futures are down 3.25% and the ag complex (DBA) is down 0.70%.

The 10-year treasury is up (yield down) and the dollar is up 0.60%.

Among our 37 core positions (excluding cash and short-term bond ETF), only 4 -- AT&T, treasury bonds, Verizon and our consumer staples ETF -- are in the green so far this morning. The losers are being led lower by uranium miners, AMD, Disney, base metals futures and metals miners.

Here's me quoting me quoting Jesse Livermore last July:

I concur with Jesse Livermore's call for patience, but only when the macro work's been (being) done and, therefore, the investor is sitting tight on a fundamentally sound, diversified portfolio:
"The reason is that a man may see straight and clearly and yet become impatient or doubtful when the market takes its time about doing as he figured it must do. That is why so many men in Wall Street, who are not at all in the sucker class, not even in the third grade, nevertheless lose money. The market does not beat them. They beat themselves, because though they have brains they cannot sit tight."

Have a great day!

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