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🚨This morning's CPI came in lighter than expected
Unemployment claims also came in lower than expected
Unemployment claims also came in lower than expected
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As market drop, small caps jump higher on cooler CPI data. The RUSSELL is very much interest rate sensitive and has been a sector lagger and is now leading gains over the other indices. One thing to note is that we could be seeing a rotation from mega caps and big names into the other indices that had fallen behind.
Data from the A1 EdgeFinder
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The NASDAQ dropped as much as 2% at the time of writing this marking a long overdue pullback in the tech market. If the rotation out of big tech continues, we might see the NAS100 give back all of its July gains or more. Big names like NVDA, MSFT, AAPL, GOOG and META are all down between 2-3% after this CPI data.
-Frank
-Frank
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As yields take a tumble, bond prices jumped on cooler inflation data. The 10 year treasury note is now considered a strong bullish reading on the EdgeFinder due to the reinforced belief that a rate cut will happen this year, even as soon as September.
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Retail seems to be heavily long dollar and oil while shorting the US indices except for RUSSELL. Gold remains mixed with DOW and DAX.
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There was a large divergence in COT last week between mega caps and small caps as the DOW, SPX, and NAS all saw buys from smart money while the RUSSELL was one of the largest shorted for the week. I would imagine that this Friday's COT report will be different. We could see selling on the big indices and buying on the small caps.
Data from the A1 EdgeFinder
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This marks the fourth month in a row of declines for CPI in the US. That is the first time it's happened since January of 2023 which suggests the trend could continue lower to the Fed's liking.
Data from the A1 EdgeFinder
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