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Afternoon Note

Implications for Inflation

By Charles Payne, CEO & Principal Analyst
1/12/2021 1:23 PM

The market has traded in a very narrow range as all the action is in the bond market.  The move out of bonds should help equities, but Wall Street is surveying the implications for inflation. With that in mind, would a spike in inflation alter the plans of for the Federal Reserve? 

The Fed is not going to hike rates, but they could have trouble priming the pump for even more accommodation. This could be a moot point if President Biden comes through with all the cash being whispered about in the corridors of Washington and canyons of Wall Street. 

Meanwhile, I have to admit, I underestimated the move in crude oil, which continues to gush higher.  The overall theme of fresh names continues, however, as old, and new safe haven sectors are all lower:

New Havens

Traditional Havens 

S&P 500 Index



Communication Services    XLC



Consumer Discretionary XLY



Consumer Staples XLP



Energy XLE



Financials XLF



Health Care XLV



Industrials XLI



Materials XLB



Real Estate XLRE



Technology XLK



Utilities XLU



There is a ton of action beneath the surface, so we are busy. 



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