Friday, December 15, 2006

CPI Offers Another Benign Inflation Datapoint

The markets are again bouncing at the open. The Nasdaq hit a new high this morning. Better late than never. I expect it to resume its leadership role in the near future.

The CPI data came in below expectations (+0.0% vs. +0.2% consensus), a bullish sign. This should again help ease the inflation fears. To wit, the 10-year yield is falling 8 basis points this morning to 4.51%.

Oil and gold are also down slightly, while the dollar is firming. The dollar has actually been strong all week.

The AMG fund data show more outflows from equity mutual funds, though ETFs showed inflows. But again, money markets saw the biggest inflows ($17 billion). I think if the Fed cuts rates next year, this mountain of money could begin to look for a home in riskier assets.

In other news and notes:
  • AMGN CERA trial pushed out 3 more months
  • AAPL delays filing 10-K; will need restatements
  • Asian and European markets strong overnight
  • ThinkEquity starts CTXS with Buy, $40 tgt
  • TW defends SIRF; mkt remains barely tapped
  • ITW cuts Q4 EPS guidance
  • USAK lowers EPS guidance
  • BSC target upped to $190 at BofA



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