Still Climbing That Wall of Worry

So many investors were worried about today's CPI report, that I suspect many were underinvested relative to what would happen if we got a benign report.

Well, that is exactly how it played out. The core CPI came in at +0.1% (vs. +0.2% consensus), which brought the year/year rate down to +2.2%. This is withing the Fed's comfort zone, and should keep them on the sidelines a while longer.

Bond yields are dropping on the news, with the yield on the 10-year down to 5.17%. And since the stock market has been taking its cue from the bond market lately, the Dow is surging more than 130 points right now. And the S&P is only 1 point from a new high.

In stock news, INTC got a big analyst upgrade and is helping power semis higher. Nymex (NMX) is rumored to be exploring a possible sale, and Penn Gaming (PENN) was acquired by a private equity consortium for a +31% premium.

Asian markets were all higher overnight, and Europe is also up nicely. Participation among the subsectors is broad, although its still early in the session.