Author: UPFINA

The market doesn’t expect inflation to stay as high as it was in April. Keep that in mind before you short the reflation trade.

Higher inflation and rates are bad for stocks. The S&P 500 can’t trade at above a 20 PE multiple in that environment.

The labor market is tight even though the unemployment rate is high. This is the impact of the pandemic and stimulus measures.

Permanent unemployment rose in April as job openings are spiking much quicker than hires which signals high dislocation in the labor market.

If this report holds up through revisions, we can look to initial jobless claims excluding Ohio as the early warning sign that correctly predicted this weak headline reading.