The market is sticking with the new script of indifferent starts, with a small spurt higher, and then drifting lower.
I’m not sure what’s driving the weakness at the moment. There were comments from Dallas Fed President Robert Kaplan that he expects inflation to push “well in excess” of 2.5% before moderating. The headlines could have trigger algorithms, but it’s not necessarily news.
We’ll get the FOMC minutes later, and maybe, there will be more insight on Fed thinking. The key is a show of unity around the Powell Doctrine, which centers around holding rates down into 2024, while allowing inflation to run hot for an extended period of time.
Part of that inflation story revolves around the pace of reopening the economy, which Goldman Sachs (GS) currently models at 78.0%.
Maybe, in a bit of irony, every sector in the S&P 500 is lower except Communication Services and Technology.
These moments, where the internals are a lot worse than the overall indices, adds to frustrations. Keep in mind, these kinds of lulls are short lived, even if each day feels like a week.
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