Inside Markets

The SPX is now overbought with signs that higher prices are driving performance anxiety as sidelined investors are forced into equities.

The CBOE Volatility Index (VIX) returns to YTD lows near 12, which should keep the momentum trade intact for the time being.

A sharp decline in the US Economic Surprise Index challenges the benign macro environment that gave us low volatility and higher multiples.

The SPX is on track to make a new high above 5254, with the next price objective at 5415.

The SPX currently sits ~60bps below the all-time high of 5254 made on March 28 when 10-year Treasury yields were 4.20%.

Consensus is looking for headline CPI to rise +0.4% MoM and 3.4% YoY with core CPI expected to rise +0.3% and +3.62%.

US equities finished higher with the S&P 500 (SPX) on pace for a third-straight weekly gain after three-straight weekly declines. The SPX is also ~1% below its late-March all-time high of 5254. REITS are the upside standout by sector after EQIX reported a positive audit

A catalyst vacuum until next Tuesday/Wednesday should mean trend continuation (biased higher) for the SPX, but the index will likely struggle on the advance to strong overhead resistance at 5254 (~1.45% above current levels).

US equities are mostly higher after a quiet session yesterday ended with all three major indices advancing more than 1%.

The SPX is currently trading above near-term resistance at ~5130 with a better close, effectively removing CTA selling pressure from the list of worries.