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What a Stock Market Rally!

Morning in the Markets

Briton Ryle by Briton Ryle
December 13, 2022
in Stock Market News
0
What a Stock Market Rally!

Business success with growing, rising charts and businessman in background

Wow! What a rally yesterday! And it looks like the good times will keep rolling today. S&P 500 futures are up 114 points – almost 3% – in the pre-market. And it’s because this morning’s CPI print came in better than expected. 

I was getting the vibe yesterday that there was a bullish undercurrent building as we moved toward today’s CPI and tomorrow’s Fed meeting. As I laid it out in yesterday’s Morning in the Markets, there were three pillars for the bullish case…

One was the successful test of support at 3,920 on the S&P 500.

The second was today’s CPI reading. As I just said, the CPI came in better than expected. And that’s significant because, if you recall, last week’s PPI came in worse than expected. So it was reasonable for the market to expect companies to pass their higher costs on to the consumer, thereby pushing the CPI higher. That didn’t happen, and it was a very welcome surprise.

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But the good news from the CPI also gives us a little insight into the third pillar of the bullish case: what the Fed will do and say tomorrow…

The concern for investors yesterday was that Fed Chair Powell might deviate from the script and deliver another 75 basis-point hike instead of the 50-point hike that the market universally expects.

A higher-than-expected 75-point hike would suggest that something had changed, inflation expectations had worsened, and the Fed felt forced to act more aggressively. And the only data point that could have put a little panic into the Fed was this morning’s CPI number…

This morning’s CPI number completely removes the possibility of a surprise 75-point hike. The market is now convinced that the Fed will stick to the script. 50 basis points tomorrow, then two more 25-point hikes early next year, and that will be it (at least for a while). And really, we couldn’t ask for much more than that. 

The S&P 500 will blast above its 200-day moving average at the open. Tech stocks are flying higher in the pre-market. And Meta (NASDAQ: META) is among the biggest movers, up better than 6%, as I write. Amazon (NASDAQ: AMZN) is ramping up 5% early, and we will get the latest retail sales data on Thursday.

Interesting….

That’s it for this morning, take care, and I’ll talk to you tomorrow.

brits-sig

Briton Ryle
The Profit Sector

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Tags: Amazon (Nasdaq: AMZN)Consumer Price Index (CPI)InflationMETA (NASDAQ: META)S&P 500
Briton Ryle

Briton Ryle

I’ve been trading, investing, and sharing my insights with individual investors since 1998.  Back then, the internet was not a very useful research tool. Armed with a library card and a huge budget for the printer, I’d scroll the microfiche for Wall Street Journal and Financial Times articles. I bought technical books on wireless technology and fiber optic networks. I traveled to Chicago to learn the secrets of stock options trading directly from the experts on the floor of the CBOE.  I’ve attended and spoken at more investor conferences than I can remember…. All because I’ve always taken my responsibility to my readers and subscribers very seriously. I refuse to parrot popular opinion, offer up half-baked ideas or publish incomplete or half-hearted research.  There is no shortcut to deep research... becoming as close to an expert on topics, trends, and technology as possible. And the rewards are life-changing. The very first stock I ever recommended was South Korea’s SK Telecom. My readers enjoyed a 150% profit in a matter of months.  And after 25 years, I’ve helped tens of thousands of readers change their financial fortunes.  A few months ago, I donated all my suits to Goodwill, pulled my name off the list of speakers for the big investor conferences, and left the big city for Southern Georgia. The plan was to retire to the banks of a tidal creek that splits off from the St. Mary’s river as it enters the Atlantic between Cumberland and Amelia islands... and trade stocks when I felt like it. But, I guess retirement wasn’t for me after all. I’m back, and this is gonna be something special. 

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Protected by copyright laws of the United States and international treaties. This website may only be used pursuant to the Terms and Conditions and any reproduction, copying, or redistribution (electronic or otherwise, including on the World Wide Web), in whole or in part, is strictly prohibited without the express written permission of The Profit Sector, LLC. 415 1st Ave N #19868, Seattle, WA 98109

© 2024 The Profit Sector, LLC. All rights reserved. Our website provides stock market research, commentary, and analysis. Information is provided “as is” and solely for information purposes, not for trading purposes or advice.

Nothing on this website should be considered personalized financial advice. Any investments recommended herein should be made only after consulting with your personal investment advisor and only after performing your own research and due diligence, including reviewing the prospectus or financial statements of the issuer of any security. The Profit Sector, its managers, its employees, affiliates and assigns (collectively "The Company") do not make any guarantee or warranty about the advice provided on this website or what is otherwise advertised above. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. The Company is not affiliated with, nor does it receive compensation from, any specific security. To the maximum extent permitted by law, the Company disclaims any and all liability in the event any information, commentary, analysis, opinions, advice and/or recommendations provided herein prove to be inaccurate, incomplete or unreliable, or result in any investment or other losses.

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