As noted in our market wrap this morning, stocks have squeezed 4 trading sessions - the longest stretch since August - since the guts of the NFP data last Friday were deemed goldilocks (despite the headline beat of +336k vs +170k consensus) with attention instead focused on the very weak guts of the report (surge in part-time jobs and multiple job holders, easing wages, soft landing here we come). As such, the short squeeze we discussed over the weekend means that tape remains resilient in the midst of the geopolitical developments over the weekend.
In his preview of today's CPI print, Goldman's John Flood writes this morning that the rally will continue today if CPI is 30bps (or softer), especially since "stock holders are delighted to see that rates have stopped moving higher (for now at least)."
As we wrote in our CPI preview, Goldman is calling for Core MoM of +22bps vs street consensus +30bps driven by a significant decline in used car prices. Flood thinks it will take a reading north of 35bps to hit the tape, especially in face of recent positioning dynamics touched upon below.
