Episode 795: The DC Today - Tuesday, February 13, 2024

Today's Post -https://bahnsen.co/49ze1fb

The big news today and cause for the market volatility was the latest read on inflation, with both Headline and Core CPI coming in one-tenth higher than expected (you read that right, above expectations by just one-tenth for the month). There were words thrown around like ‘hot’ inflation and a ‘spike’ in treasury yields circulated around the media to sensationalize it, and I am not at all making light of a down 524 point market day, but truth be told, while we are seeing a continued path of disinflation in this country, that path was never going to be a straight line. Keep in mind here as well that we came into today with 14 of the last 15 weeks to the upside by roughly 20% in stocks and a five-handle S&P 500 starting point. That long streak has only happened five times in history since 1928, with the last time being some 52 years ago.

Suffice it today, with a complacent VIX coming into today’s number, we were also frankly due for some of this sell-off. As one would have expected, yields moved higher across the curve on the day, with the 10YR closing up 15bps at 4.32%. We did come off the intra-day lows heading into the close, but a lot of this move felt overdone to me (both in yields and stocks.

Links mentioned in this episode: TheDCToday.com DividendCafe.com TheBahnsenGroup.com