Equity markets wobbled for a 2nd straight day as investors weigh the impacts of the latest round of economic data. The January retail sales came in hot at up 3.0% despite the pressure of inflation, say some headlines. The real takeaway is that sales jumped 3.0% because of inflation and higher prices. In most cases, S&P 500 companies are reporting a unit volume decline offset by higher pricing. In this scenario, sales can only increase by so much until the consumer is stretched to the limit.

The release of the producer price index will impact Thursday's action. If the producer price index comes in hot and confirms the near-term acceleration of inflation, the market will not take the news well. The S&P 500 is already struggling to maintain its footing at its current level; another indication the FOMC will continue to hike rates and keep them high could spark a "head for the hills" rush for the exits and bring the entire market down with it.