Equities tread water on Tuesday with the S&P 500 holding within a tight range consistent with the previous trading session. The move is on the back of better than expected earnings and positive economic data but the market is cautious. With the CPI data due out on Thursday there is a risk for another inflation-driven sell-off. The CPI is expected to moderate on a month-to-month basis but accelerate on a YOY basis and the data could be hot.

The danger that no one seems to be talking about is the outlook for earnings. There are signs of easing within the supply chain but they are localized and not seen across the broad market. This means earnings growth in the 1st quarter of 2022 will be impaired by rising costs for freight and systemic shortages and that is weighing on the outlook for earnings growth. If there is one thing that can guarantee a market correction is it's a downtrend in the outlook for forward earnings growth.