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Futures Rise as Retail Traders Shrug Off Hottest CPI Since 1992

Futures Rise as Retail Traders Shrug Off Hottest CPI Since 1992

Happy Friday folks! Let's get right into it today. US Futures traded relatively flat in the overnight session with the Dow down -0.12% to 34,420, the S&P down -0.11% to 4,233, the Russell up 0.29% to 2,315, and the Nasdaq up 0.07% to 13,969 as of 8:30AM.

Yesterday's PA came as a bit of a surprise to trading desks across the Capital Markets, as the typical reaction to red hot inflation is a more hawkish shift in policy and an increase in the cost of servicing debt, pulling a significant amount of flows away from growth heavy indexes such as the Russell and Nasdaq, leading to more defensive positioning at the very least. However, sans the light selling on the Russell, what we saw was next to no fear at all, or demand for risk protection for that matter. Markets and particularly market signals are completely broken right now it would appear, as Billionaire Stan Druckenmiller rightly pointed out shortly after the red hot data.

The best performing trading strategy over the past year has been buy and hold. So in other words, doing absolutely nothing but remaining as risk on as possible, this entire time, which many, if not most, retail traders have done, has outperformed hedge funds by 10 to 1. In my honest opinion, this is no longer a "market," far less an efficient or free market.

The US10Y yield continued to fall as bond markets bought the Fed narrative of transitory inflation , and almost completely ignored Thursday's highest CPI print since 1992. The Dollar ( DXY ) rose 0.32% to 90.35 showing potential signs of derisking in growth, while Vix slipped back to a 15 handle, and is sitting at the lowest level since before the March 2020 lockdown crashed markets 35%. Gold is sitting just below 1,900 around 1,890 and is down -0.30% on the day, while Bitcoin ( BTCUSD ) rose 1.38% to 37,215. Finally, USOIL rose 0.11% to 70.16.

* I am/we are currently long HUV , UVXY

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