Equities retreat ahead of the December FOMC meeting because of a growing fear of inflation. The last few consumer inflation reports suggested inflation had peaked but that was belied by the PPI index on Friday. The PPI came in hot on all counts and points to ongoing systemic inflation that will lead to higher consumer prices down the road. The takeaway is that the Fed may slow the pace of interest rate hikes but the duration and peak rate will be more than the market is expecting.

Other than the FOMC meeting and PPI there is little for the market to pay attention to other than economic data and there is a lot of that on the Calendar. Reads on Empire Manufacturing, Philly Fed MBOS and Retail Sales top the list of reports and they are expected to show a mixed picture of the economy which will do little to cheer investors ahead of the holidays. A Santa Claus Rally may be coming but it's not here yet.