Market Cheers CPI Inflation Report

The market opened on a weak note yesterday, and then reversed all of its losses into the close. Today, the market has opened on a strong note. So I am wondering if we can maintain this into the close, or if the early gains might fade?

Investors cheered the CPI report before the bell, which showed that the CPI rose +0.2% (vs. +0.3% consensus), and the core CPI (ex- food and energy) rose just +0.1%. High inflation is usually bad for stocks, so this report that shows that maybe inflation is moderating is a big positive for stocks. Of course, it doesn't help that food costs rose the most since 1990, but is that sustainable?

Oil is trading a bit lower after the Dept. of Energy said that crude inventories rose, albeit by a smaller amount than forecast. Oil is still trading near $125. And with oil this high, solar stocks look increasingly attractive.

Deere (DE) and Whole Foods (WFMI) are trading lower after missing earnings estimates, while Freddie Mac (FRE) is trading higher after topping expectations.

Asian markets were mostly higher overnight, and the Yen is lower vs. the dollar for the 3rd day. The 10-year yield is steady at 3.90%, after a big day yesterday. And the VIX is another -3.3% lower at 17.40. With volatility this low, its probably not a bad idea to buy some puts for protection, if you're so inclined.