On Friday, the market woke up to great news. Mission accomplished on inflation.

Yahoo Finance reported: “The Fed’s preferred inflation measure — a ‘core’ Personal Consumption Expenditures index that excludes volatile food and energy prices — clocked in at 2.9% for the month of December, beating estimates.” Furthermore, the core PCE inflation rate fell to 1.5% on a three-month annualized basis, its lowest since late 2020. On a six-month basis, it was 1.9% for the second month in a row. Both of those marks are below the Fed’s 2% target. However, the PCE does not include food and energy.

Another headline that hit the news Friday: “Yemeni Houthis hit with a missile a tanker operated on behalf of commodity trading giant Trafigura. The tanker is on fire.”

Oil traded over $78 a barrel. The price cleared the 200-daily moving average and confirmed an accumulation phase. Should oil remain above $78, the next level to watch is $80. Over $80, an emotional trip to $100 is not out of the question. More importantly, that could trigger a bigger move in gold and silver.

Of course, the Fed cannot dot plot war and geopolitical stress… but shouldn’t they?

Click here to get read more on oil, plus receive actionable information of key ETF indices and sectors.

Remember this?

If you do not, this is the chart that overlays CPI from the 1970s with CPI from 2014 until the end of 2023. CPI fell to under 2% in 1976-1977, then turned right back around and screamed. Oil had a lot to do with that.

Here we are. CPI is not quite at 2%, but core PCE is. Should oil continue its run and become more parabolic in nature, then this chart is eerily prescient.

Super cycle of commodities? Not all commodities have to run in a super cycle, like the one that began in 1977 until the peak in 1980. But if oil and metals take charge, along with certain food commodities, then the FED will be stuck.

As for the market that has been counting on rate cuts to keep the equities moving higher? That will present a newer and bigger worry…

Stagflation.

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Follow Mish on X @marketminute for stock picks and more. Follow Mish on Instagram (mishschneider) for daily morning videos. To see updated media clips, click here.

Mish in the Media

In this video from CMC Markets, Mish looks at a selection of popular instruments, outlining their possible directions of travel.

Mish is a favorite guest in Singapore, where she gets to discuss the macro and how to think about investing in the big picture. In this short clip from Breakfast Bites, Mish talks TSLA.

In this video from Stockpick, Jillian Glickman and Mish discuss economic outlook and current investment picks plus forecasts on inflation

Mish and Dale Pinkert discuss the equities and futures markets and how she and MarketGauge are positioned right now in this FXTrader interview.

In this video from CMC Markets, Mish looks at a selection of popular instruments ahead of today’s US Q4 GDP announcement, outlining their possible directions of travel.

Mish makes up a new ETF (not real) called VAIN, but really discusses the basket of stocks that are worth watching in this appearance on Yahoo! Finance.

Mish discusses Alibaba and how the rumors of China’s impending demise might be a bit exaggerated on Business First AM.

Mish talks all about retail and stock pick Abbvie (ABBV) on Business First AM.

Nicole Petallides and Mish dig deep into trends and stocks to watch for next big moves, as we are in full January trend mode on this video from Schwab Network.

On the Monday, January 22 episode of Your Daily Fivefrom StockCharts TV, Mish sees the potential for consumers to spend more money, from self-help to dieting, to makeup to skincare to fashion — pointing out several relevant stocks and how to trade them.

Mish looks at a selection of popular instruments in this video from CMC Markets, outlining their possible directions of travel.

Mish joins Jason Perz on the Against All Odds playlist, where she covers it all talking the mental game of trading, commodities, futures, equities, technical analysis, and macro.

Mish’s Market Minute on StockCharts TV returns, all new! Mish and Geoff Bysshe share how the powerful “Calendar Range” StockChartsACP plugin tells you who and what to believe, when to act, and what to trade. The new year is a big “reset” emotionally, and January sets the tone for the next six months AND the year. Every month is “like an inning in baseball,” financial reports focus on quarters, but analysts think in terms of the first half and second half of the year. How can you harness this knowledge to your benefit? Watch to find out!

Coming Up:

January 30: Breakfast Bites, Singapore Radio

February 2: Benzinga Pre-Market Show

February 5: Money Show Life with Chuck Jaffe

February 21-23: The Money Show in Las Vegas

Weekly: Business First AM, CMC Markets

ETF Summary

S&P 500 (SPY): 480 now the pivotal zone.Russell 2000 (IWM): 195 pivotal, 190 support to hold.Dow (DIA): 375 support.Nasdaq (QQQ): 408-409 support.Regional banks (KRE): 50 key to hold.Semiconductors (SMH): 184 support.Transportation (IYT): 262 now pivotal.Biotechnology (IBB): 135 pivotal.Retail (XRT): Held support at 65, but still needs to get back over 70.00.

Mish Schneider

MarketGauge.com

Director of Trading Research and Education