October 13, 2022

The DC Today - Thursday, October 13, 2022

15 minutes

Okay, so one of the largest intra-day market moves on record (from down -550 to up +950 – a 1,500 bottom-to-top move today). So there is market action AND inflation/economic action to unpack, and you have come to the right place:

MARKET ACTION

Dow: Up +828 points (+2.83%) – was down -550 points at the low

S&P: +2.60%

Nasdaq: 2.23%

10-Year Treasury Yield: 3.95% (+5 basis points)

Top-performing sector: Financials (+4.14%) – I am not going to take the time to look it up, but I will safely guess that this is the best day in years for Financials; in fact, I bet HALF of this would be the best day of 2022 for financials … NOTE: Energy was right behind it at +4.08%

Bottom-performing sector: Consumer Discretionary (+0.98%)

WTI Crude Oil: $89.25/barrel (+2.27%)

Key Economic Point of the Day:

CPI (headline) increased +0.4% for the month where +0.3% had been expected. Headline inflation is up +8.2% on the year vs. a peak of +8.9% several months back.

Core CPI (ex food and energy) was up +0.6% in September. Energy prices fell -2.1% but food prices increased +0.8%. It is all about food inflation in the aggregate data.

Services is the source of increased inflation. Rents were up +0.8% on the month and primary residence impact is up +7.2% year-over-year. This is simply not true in the present tense but the lag effect is the driver here as we shall all see in a couple months’ time.

The Fed has NO influence on this, but Health insurance prices were up a staggering 2.1% on the month and are up +28% on the year

Airfare is up 43% on the year (base effect from limited travel a year ago)

Goods prices were FLAT – slowest year-over-year increase since May 2021 (+6.6%)

Used car prices down -1.1% on the month

Clothing down -0.3%

Links mentioned in this episode:

DividendCafe.com

TheBahnsenGroup.com

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By The Bahnsen Group

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