Data, schmata… what’s in a number anyway?

12 December 2022.

This is a big week, with the release of the latest U.S. inflation number. Expectations are for year over year Consumer Price Index (CPI) to continue to drift lower, falling from 7.7% in October to 7.3% in November. This decrease is already priced in, and as we’ll get to later in this Ethos, there will be more to come. It’s the deviations from the expected that catch the market off guard and can ignite a larger market move.

Case in point: the 17% rally off the October lows from a rather meagre 0.2% positive surprise. Markets have already started getting a case of the jitters, with the S&P 500 posting five straight negative days. The substantial rally has brought some holiday season cheer but appears to be petering out ahead of CPI and the next FOMC meeting.

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