The Feds Conundrum

"Should I stay or should I go now, If I go there will be trouble If I stay there might be double, Should I stay or should I go" In the words of the Clash, which I think in ways describe the Feds dilemma. 


Reuters this morning on UK inflation double what was expected: Read More


China PPI rises, Inflation at 4.9 slightly below forecasts, food inflation extremely high, remember all those mouths to feed. Read more. 
Now back to the markets where no one really cares about debt of inflation. So futures up a bit once again this morning gold futures are up 8 dollars.


Other than Japan's GDP coming in a bit better than expected and the rebound in Asia based on the Mubarak news, there just wasn't much happening as the week began. We had no economic data to review before the open and there wasn't anything of significance on the calendar for today.

The week began without a significant gap. The SPX traded sluggishly and mostly sideways but did something a bit rare by putting the low of the day on the chart after the opening hour, at 10:49. But the dip buyers arrived on cue even though the dip was miniscule and the index began to gently ascend. We felt like we were trapped in a theater watching the same movie over and again today as the market did the low volume levitation act that we have seen so often. Once again the lows were in the morning and the highs were near the close. This may be a new week but it sure looks a lot like the old one.

Checking our Market Leaders board this evening we find a mixed set of leaders. The Dow, Emerging Markets, and Germany closed lower. Every leader had a smaller than 1% range with the sole exception of the chip makers ($SOX) and no one netted anywhere near a 1% gain or loss. It was truly sluggish with all the leaders were standing still.


Sectors stronger than the SPX for Monday:
- Basic Materials -- Outperformed the SPX by +84%.
- Energy -- Outperformed the SPX by +195%.
- Health Care -- Outperformed the SPX by +10%.
 
Sectors weaker than the SPX for Monday:
- Financials -- Underperformed the SPX by -17%.
- Industrials -- Underperformed the SPX by -40%.
- Technology -- Underperformed the SPX by -10%.
- Consumer Staples -- Underperformed the SPX by -68%.
- Utilities -- Underperformed the SPX by -88%.
- Consumer Discretionary -- Underperformed the SPX by -64%.