The week ahead for stocks

5:15pm EST I have been pretty accurate over the past 4-6 weeks. I am worried that this week would be a break in the streak if I threw a prediction out there this week. Therefore, I am staying away from a specific prediction for the week. I will tell you that Monday should be pretty strong. After that we wait on econ data. The big economic reports are going to be the PPI on Tuesday and CPI on Wednesday. The market has been debating the effects of inflation or upcoming inflation in the system. A dramatic shift in one direction or the other will tell you the market direction going forward.

While I personally have absolutely no faith in the numbers that come out of the government, the bottom line is that these numbers move the market. PPI and CPI do their best to be a good inflation gauge, they simply aren't. They do very little to take into account things like higher education, medical care, food and energy and the way they suck money out of the economy.


Economists like to strip out energy and food prices to compare month over month. While it makes sense because the numbers are volatile - volatile numbers are hard to compare- it makes for a lack of intellectual honesty. The bottom line is that too much inflation hurts the economy. Deflation hurts the economy. When you are not looking at the true numbers -just stripped out numbers- you are not able to tell the true effect on the economy. Either way, the inflation numbers are going to be market moving events. Look out for them. Until next time, stay low risk.

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