The markets are higher for the third day in a row as we get ready to call it a week. Inflation is back in the news, and it appears that it is trending more so than it is transitory. Retail sales clocked in at the higher end of the expectations (0.7%) M/M despite labor shortages, material shortages, and supply chain disruptions driving prices higher (.04% M/M and 5.4% Y/Y). While there is hope for the labor side of things given the expiration of benefits for many, it seems as though it will be a while before things are anywhere near back to normal.
Earnings season is back in full swing. Thus far, results have been positive with most of those reporting beating analysts’ estimates. Despite some of the obvious headwinds that persisted through the last quarter, the consumer remained quite active. I would expect strong earnings to continue to be released as a result. However, consumer sentiment came in this morning at a mere 71.4. That is the worst reading since 2011 as consumers are starting to show signs of concern over inflation.