Chart I For a strong stock market in early 2023, VIX must decline below 20, toward 15. VIX is currently at 18.73. Since fixed income volatility controls the VIX, volatility on the 20-year Treasury ETF (VXTLT) must also decline below 21, which occurred on January 26. VXTLT is currently 19.87 (See…
Table I Percent Changes in CPI for All Urban ConsumersSeasonally adjusted changes from preceding month December CPI has 59% of components in deflation.Wage inflation remains at 3.5%, which is consistent with 2% core CPI (annualized over the last 3 months).December core PPI was reported at +0.1 versus +0.4% last month, and…
Chart IFor a strong stock market in early 2023, VIX must decline below 20, toward 15. VIX is currently at 19.7. Since fixed income volatility controls the VIX, volatility on the 20-year Treasury ETF (VXTLT) must also decline below 21 (See A, Chart I). VXTLT is currently 21.4. Most importantly, Bank…
The following article, published by the Wall Street Journal on January 6, 2023, discusses the dramatic rise and almost imperceptible fall of inflation over the last 12 months. Key Takeaways Over the past 12 months, CPI inflation has been at an alarming rate of 7.1%. But the US economy got there as…
The following article, published by Bloomberg on January 4, 2023, sums up well the unique factors in today’s economy with inverted yields have led to a false recession signal. Key Takeaways Everyone using the yield curve as a predictor forecasts recession in 2023.Normally, the spread of the 3-month T-Bill to the real…
