This brief market update is in response to the CPI report for August which was released this morning. As I write, the Nasdaq 100 (NASDAQ:QQQ) is down 4% and the S&P 500 (NYSE:SPY) is down over 3%. Given the violent reaction, the question becomes is the August CPI report new information or noise?
The best place to start is with the paraphrase of Jerome Powell’s Jackson Hole speech from my prior market update on August 29, 2022: S&P 500: Where we go after Jackson Hole.
Today my focus is narrower… my message more direct… the overarching focus of the Fed is to get inflation back down to 2%… this will require using our tools forcefully.
In reaction to Powell’s words at Jackson Hole, the S&P 500 fell a similar 3.38% and the Nasdaq 100 fell over 4% on August 26, 2022. Returning to the key question, is the CPI report information or noise?
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