Anyone worried about CPI tomorrow?This market has been running hot, and running hot for a long time without a correction... lots of talk about CPI tmrw being a significant downward catalyst if it comes in hot.
It seems like the estimates for Feb have been revised upwards, so most likely there won't be a surprise in my view. However, the possibility of hotter than expected CPI remains, and if the number is hot, I think it will cause a lot of trepidation considering Jan was hot too.. and that is causing me to sit out the announcement tmrw (sold today) and buy back in if there is a big drop (FTN, FFN and DFN).
Over the short-medium term, I think there will be cuts this year even if inflation remains sticky in the 2-3 range. So, the banks should be OK over the course of this year, barring no surprises, and these splits I'm betting will be paying and appreciating throughout the year.
But due to the nature of these splits, the short term volatility can be vicious. Their inherent leverage, and my use of margin, is forcing me to be overly cautious when I'd otherwise ride it out.