To The Moon

The US June CPI exploded again, not as much as the 10% rumor yesterday, but 9.1% year-on-year, the biggest increase since the end of 1981. June core CPI 5.9% y/y vs. 5.7% exp. & 6% last, reflecting higher gasoline, housing and food costs.Futures fell sharply after the data was released, while interest rate hike expectations followed suit.

As soon as the data was released, the market immediately expected a 75bps rate hike in July. Half an hour later, the fed watch tool's 100bps probability for a July rate hike rose to 20%, and 10 minutes later it rose to 41.6%.

It is estimated that you may wake up tomorrow morning to find that the July rate hike expectations have changed to 100bps.

But I think it's time to think about bottom-fishing.

Looking at the specific data, the main driver of the MONTH-on-month CPI is energy, and it is already true that energy prices have dropped significantly, so there is absolutely no chance that the CPI will exceed 9% again in July.

In other words, for rate-sensitive stocks, this is the penultimate big shock (the last was the FOMC meeting at the end of the month).

There's no problem with tech stocks such as those that are sure to get big money in, like Tesla. However, considering the next stage of bottoming, it is not recommended to buy stocks directly or aggressive call, sell put is more prudent.$TSLA 20220722 600.0 PUT$

Bottom-hunting stocks also need to be well chosen. The bottom of the market does not mean the bottom of stocks. Big thunder still lies ahead of this earnings season, which begins tomorrow.