Week Ahead - Feb 10-14

I hope everyone is enjoying the weekend and getting ready for the big game. Last week was jobs heavy data and this week is inflation.

On Tuesday, we get the NFIB small business update, which I will want to monitor for continued optimism and expansion plans. Wednesday comes with CPI, Thursday with PPI and Friday with retail sales and industrial production. Of course, we are also going to continue to get bombarded with policy announcements that are happening at lightning quick speed. This means the markets are also responding to hopes, dreams and vibes as much as actual economic data, and that is very challenging for traders. This past week was such an example, which I found difficult to navigate.

In case you didn’t see, I published two deep dive notes this past week.

Which way, housing market? looks at both sides of the housing market arguments.

FCI: Overheat is the Risk, which was published before the NFP report, discusses the risk from an overheat.

Everything we are seeing in the labor market was explained in August after the growth scare, where in The State of Labor, I explained that the labor market remained very strong and the softening was coming from immigration and youth employment and that we will see a decrease in unemployment ahead. These views were very out of consensus at a time when people were panicking and calling for 250 bps of cuts over a year, and were a large driver of trading strategies and alpha since, so it’s good to re-read old notes from time to time.