Investors Elated On CPI Data, Dr. Copper At A New High On Short Squeeze
Written by Emily J. Thompson, Senior Investment Analyst
Updated: May 15 2024
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Source: Benzinga
Cooler Inflation Data:
- Stock market is breaking out above resistance zone, with RSI at an extreme overbought level.
- Consumer Price Index (CPI) slightly cooler than expected, but core CPI remains high.
- Retail sales data indicates consumer pullback, impacting earnings.
- Copper futures hit a new high due to short squeeze, not indicative of the economy.
Magnificent Seven Money Flows:
- Positive money flows in Alphabet, Meta Platforms, NVIDIA, and Tesla.
- Neutral money flows in Apple, Amazon, and Microsoft.
- Positive money flows in SPDR S&P 500 ETF Trust and Invesco QQQ Trust.
Momo Crowd And Smart Money In Stocks:
- Momo crowd buying stocks aggressively, while smart money is inactive.
- Smart money typically sells into strength from momo crowd and buys into weakness.
Gold:
- Momo crowd buying gold, while smart money is inactive.
- Popular ETFs for gold are SPDR Gold Trust GLD and iShares Silver Trust SLV.
Oil:
- API crude inventories show draw higher than consensus.
- Momo crowd selling oil, smart money inactive.
- Popular ETF for oil is United States Oil ETF USO.
Bitcoin:
- Bitcoin being bought aggressively despite lower CPI, challenging its role as an inflation hedge.
Protection Band And What To Do Now:
- Consider holding existing positions and setting protection bands with cash or hedges.
- Adjust hedge levels based on risk preference and market conditions.
Traditional 60/40 Portfolio:
- Long duration strategic bond allocation may not be favorable currently.
- Consider focusing on high-quality bonds or using bond ETFs tactically rather than strategically.
Analyst Views on SPY
Wall Street analysts forecast SPY stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for SPY is USD with a low forecast of USD and a high forecast of USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
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Current: 688.980
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About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
