Key insights
- Today's CPI release is a key focus following strong payroll numbers that diminished recession fears. A 'hot' CPI reading would likely lead the market to anticipate a more hawkish Federal Reserve, pushing Treasury yields higher. This scenario could exert downward pressure on growth-oriented stocks, particularly in the AI and semiconductor sectors, as higher borrowing costs and inflation concerns weigh on valuations and future earnings expectations.
I have been looking the market all the week. Last week’s payroll numbers basically killed the recession narrative. The U.S. economy is still running stronger than expected, unemployment remains low, and now the focus shifts back to inflation. If CPI comes in hot, I think the market will have to price in a more hawkish Fed, higher Treasury yields, and potentially more pressure on growth and AI stocks.
Yesterday I sold som stocks but still holding MU and AAOI as its far away from the bear zone.
Are you holding semi stocks?