This rally is on a hairpin trigger. Once it tilts slightly higher, hold onto your hats. Once again, the growth sectors led the way yesterday as momentum darlings continue to blaze a trail higher.

The Hot CPI Report That Did Not Burn

The hot January Consumer Price Index (CPI) report took away a rate cut and temporarily sent the stock market lower. The February surprise barely elicited a yawn.

What’s crazy is headlines continue to blare that inflation is slowing down. This chart from Jim Bianco of Bianco Research underscores the fact the CPI stopped going down months ago.

The iconic chariot race takes place at the Circus in Jerusalem in the 1959 classic “Ben-Hur,” which has been called the most epic scene in cinematic history. 

Seventy-eight horses, brought over from Sicily and Yugoslavia, were used for the scene. Preparation took almost a year, as White sands were flown in from Mexico

It wasn’t hard to suspend disbelief – it felt as if you were in the chariot with Charlton Heston, who played Judah Ben-Hur.

Judah and his rival Messala, who was once a childhood friend, battled for nine laps. The scene takes up 15 of the 212 minutes total length of the movie. It was simply breathtaking and stands the test of time today.

When I looked at charts last night, the scene popped into my head, it was not the stock market- it was government spending in February.

Epic Spending

Government outlays were more than double the total receipts:

• $567 billion in spending
• $271 billion in receipts

• $296 billion deficit ($3.5 trillion annualized)

This is the White House flogging the nation’s purse, pushing it to exhaustion. With nine months to go, every possible way to spend money will be employed. A victory means the natural rules of prudence and assumed rules of fiscal restraint are banished.

The current spending spectacle will be just the template for Big Government run amok.

Today’s Session

Lots of pre-opening jockeying, but no definitive moves, as the buy signal is coming from selling. 

Meanwhile, Wall Street continues to come around on AI after shunning it until this year.  Bank of American and Cantor hiked targets on Nvidia (NVDA).

Additional Upgrades:

• MSFT Target raised to $475 - Evercore ISI
• AMD Target Raised to $265 - Melina   
• AVGO Target Raised to $1,616   - Jefferies
• PLTR Target Raised to $35 - Wedbush
• SMCI Buy Target $1350 - Argus
• NFLX Target Raised to $725 -Oppenheimer

Bond Watch

I’m watching bonds as yields are edging higher, again as the 2/10 curve inversion hit a new record.

Today’s 30-year auction could be a big market mover at 1PM.

Comments

Wouldn't it be nice if Chairman Powell would mention that it is difficult to predict when a rate cut might be in order, when the federal government's deficit increases every month, due to increased spending? David Lee on 3/13/2024 11:13:07 AM

What were the price targets for NVDA by BOA and Cantor?? David Moreno on 3/13/2024 11:33:59 AM

Hi David, It looks like BofA's target is $1,100 for NVDA and Cantor Fitzgerald's target is $900. Nikki on 3/13/2024 11:58:24 AM

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