QuiCQ 11/06/2026
All Quiet on the Inflation Front?
“Inflation is when you pay fifteen dollars for the ten-dollar haircut you used to get for five dollars when you had hair.”
— Sam Ewing
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A relatively quite session with an underlying bullish tone yesterday, as investors preferred to ignore the “civil war”-like noise out of LA for now, and rather focus on the positive undertone coming from trade negotiations between the US and China.
The S&P 500 closed up half a percentage point and less than two percent from reaching a new all-time high (ATH), with winners outpacing losers by about 2:1 in yesterday’s session. Only one sector (industrials) closed in the red, maybe due to some profit taking after a strong run over the past weeks, with the clear leader being Energy stocks:
It is probably safe to assume that oil stocks were also up due to advance in US-Sino trade negotiations, though the oil price itself crumbled after an initially very strong start to yesterday’s session:
Still, the price of crude is up more than 15% from its bottom and with a extended trade war likely averted, so is a deep recession, giving support to energy stocks and commodities.
Asian stock markets found further support overnight on additional comments from both sides of the trade negotiations aisle:
Though it is a bit with tongue-in-cheek that I have to point out that the US as so far not signed one single trade agreement with any country. No, with the UK neither, that was just a framework agreement for future talks …
And apropos UK … just to demonstrate that the economy and the stock market are not the same, jobless claims number for May were pretty nasty yesterday, however, at the same time the Footsie (FTSE100) challenged its previous ATH set back in March:
Given the “negativeness” of any UK resident I know and speak to, and which will probably not improve as Chancellor of the Exchequer Rachel Reeves will defend her fiscal choices in the spending review today, that rally is likely to continue …
The rates, FX and commodity complex was fairly quiet yesterday, so let’s skip this for today.
Just one final note … today’s is US CPI (inflation) day of course. As the following two tables show, the “median economist” expect both normal and core CPI to be a tad higher than the previous month.
‘Normal’ CPI is expected to be 2.5% versus 2.3% in April:
And Core CPI 2.9% versus 2.8%:
However, as one very fine hedge fund manager out of NYC wrote in his daily note last night (you know who you are Paul 😉), whisper numbers are lower. If that is true, the narrative would adapt well to the price action (up) that is going to happen anyway.
Time's up, more tomorrow - May the trend be with you!
Stocks saw a massive rebound since there April post-Liberation Day panic lows, with the S&P 500 up well over 20%. However, that twenty percent pales in the light of a nearly 50% advance by semiconductor stocks over the same period. The iShares Semiconductor Index (SOXX) ETF, which basically tracks the Philadelphia Semiconductor Index (SOX) is up 47% since its lowest close and has taken out important resistance (red dashed line) over the most recent sessions:
It is not unlikely that the previous ATH set back in August of last year will be retested, which still makes up for a tradeable 16% or so rally. Stay tuned …
