It’s another rough session as all the major indices have been under pressure all day.  Everyone is waiting for tomorrow’s CPI report, which is expected to see an 8.5% pop for last month.  That would make real income a disaster and put additional pressure on the Fed to act more harshly.  The Fed needs to go as hard as it can, and then some, out the gate as nobody would fault them.

There will be lots of guessing about last month being the top for inflation – I think it is, but that doesn’t mean it comes drifting back to earth.  It will linger for some time, and there will be a sharp period of decline, but lots of pieces much fall into place.

There are signs consumers are making adjustments, but then you have issues like the latest bout of Covid-19 in China, and that lockdown where people in Shanghai are loudly complaining about the lack of food.

It’s fair to say of the communist leaders who aren’t concerned about their own citizens starving, then maybe, they could care less about Americans – but those cheap prices are irresistible, right Ricardo?

Nuts!

Those locked down ships and containers are issues for the American public and economy.

Earnings Season

Goldman Sachs(GS) is looking for three things:

• Outlook for growth and consumer demand
• Inflation and profit margins
• Geological risk and plans to improve resiliency

I’m looking for organic demand, market share growth, the ability to keep raising prices without impacting demand, and I would love to see onshoring.

Banks kick this thing off and are expected to be the worst performers (financial sector).

There isn’t panic, but nobody is coming to the rescue today.