Fun morning hit with Maria Bartiromo asking me about my thoughts on the hot CPI print along with the recent announcement of job cuts from Cisco and Morgan Stanley.
I have been saying for months to expect some hot CPI prints and this week it happened. But let's look at some positives. Investors know that the Fed will be cutting less and later. I suggest looking at the shelter component of CPI, as it's a large part of why the estimates where off. When you look at the current inflation rates in rents, it's a lot lower than 6%. Perhaps investors are seeing through the numbers and looking ahead.
Same with job cuts. I saw this back in 2003 as we were exiting a horrible bear market, firms started cutting and laying people off. It take about 6 months to get those cuts to hit the bottom line. This will add some tail wind to earnings. If rates moderate and we escape a recession, it sets up for higher earnings a better times ahead.