Consumer Price Index data came in hot Friday morning, and the stock market liked it — the initial knee-jerk reaction was to surge higher.
Inflation rose 6.8% from last November — surpassing estimates. This is the fastest annual increase we’ve seen since 1982… I wasn’t even in kindergarten the last time the market saw inflation numbers like these!
Luckily, I’ve been predicting this for months and have the perfect game plan for how to handle this week… Starting with these two stock market charts to watch the week of Dec. 13.
2 Stock Market Charts Every Investor Should Watch the Week of Dec. 13
Taking a closer look at the CPI data, you’ll see some startling numbers…
Excluding food and energy prices, the CPI was up 0.5% for the month and 4.9% from one year ago — this is still the biggest rise in inflation since 1991.
Since November 2020, energy prices rose 33.3% (gas is up 58.1%), food prices are up 6.1% and the Department of Labor said the increases for food and energy were the quickest 12-month gains in about 13 years.
Did you know that the cost of beef is up about 26%? Even coffee and peanut butter have seen price surges. Should I even mention that used car and truck prices are up 31.4%…?
And then you see the Federal Reserve with the audacity to say it has everything under control. Doesn’t look that way, pal.
But during times like this, I like to go to one place…
Which brings me to the first stock market chart to watch the week of Dec. 13 — the 10-Year Treasury yield — and I noticed it made a really strange move…
Looking at the chart above, yields did a flash move up — putting it in a perfect spot to buy the dip coming now.
And I have a feeling we’re going to see an even bigger move in yields on Dec. 15… And the same goes for the S&P 500.
Watch the video below to learn more about the two stock market charts to watch the week of Dec. 13, and what I expect this coming week to look like.
And as always, send any trading questions to jeff@joyofthetrade.com and stay ahead of the markets, especially these choppy ones, by subscribing to our YouTube channel.
