Friday, September 15, 2006

More Signs Inflation Has Peaked

The market opened on a strong note, and has since built on its gains. The CPI came out this morning in-line with estimates at +0.2%. That got the market excited that the Fed will be on hold longer than previously thought.

Also, oil and gas prices continue to fall. Crude oil is now trading below $63. All of these are good indications that the peak in inflation is behind us. Of course, if you have been reading this site you know that we have been saying that this is what the bond market has bee telling us for quite some time.

The participation is broad so far. Homebuilders are spiking (+3.0%). Semis are also getting a big bounce (+1.8%), followed by brokers and tech. Energy is the sole group down again.

In other news and notes:
  • ITW issues downside guidance for Q3
  • ADBE gaps up on strong earnings
  • SCHW says that EPS to "handily exceed" prior forecast
  • Ford says Jaguar brand not for sale
  • Matrix downgrades URBN to Sell
  • Goldman ups MSFT price target to $33



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