Lead us not into temptation.............
If there is one thing Bangkok is not short of, its stellar bakeries, OMG, they are truly to die for. So I'm in my new favorite little bakery enjoying some ganache, custard cream puffs and cinnamon roll extraordinaire (ummmm not all for me alone) whilst enjoying some decadent fresh brewed coffee while catching up on the days events and data release. Now, while I just couldn't resist the "temptations" at the bakery, I DID resist the "temptation" to pull the trigger last night (your day). To be honest , I had some buys in but no cigars. Seemed like a bit of a coin toss, in particular after the lighter PPI print, but I held.
As I have posted starting a couple of weeks ago, I think we see a warm CPI coming up, again. I believe for the most part this has some "baked" in already so it may well boil down to how warm or not the print is, reactionwise.
It just looks and feels like a self fulfilling destiny to get to 5 on the ten year, weather this print moves us closer tomorrow is again but one more data point but it can still be impactful. It just looks like it wants to get there and as I suggested already pre-election, a Trumpet sweep brings it, along with a retest of reit lows.
At the end of the day it's anyone's (educated) guess as to if/ when we get there or for how long we breach it. I believe Trumpet's bark a little worse than his bite but he likes attention and will be boisterous at minimum. The silver lining of a 5 handle is it gets bought.
As the market usually doesn't let you buy the bottom nor sell the tops, you're going to have to jump off the bridge and start committing. I am eagerly awaiting this release and will likely start munching on something other than pastries, although the way REITs have behaved of late, they have the ability to be as bad for you as that damned cream puff!!
The one thing I did take note of was the price action of late of my U.S. REITs, which have been holding their own to outperforming in the face of higher yields of late. Is this fortelling anything? Guess we will find out shortly.
Make no mistake, IF we follow up with a soft CPI print we may be in for a face ripper. No doubt oil will figure in, but it may come down to owners equivalent rent (which I personally believe to be a tad ridiculous). It has been coming in of late and unless we see it reverse a bit it could provide additional relief.
Long for the good 'ole days when you could just look at the fundamentals of a stock, overlay some macroeconomic forecasting, throw in a little special sauce and voila........not so much anymore.
Stay good,
DZ