CHART OF THE DAY: Trivial → Of Course Inflation Is Going To Accelerate

Since TRENDs are defined as having a duration of “3 months or more”, they’re good at contextualizing The Cycle. With immediate-term TRADEs which are “3 weeks or less”, especially into options expiration, anything can happen.

Commodities are a good example of inversely correlated TRADEs (vs. USD) but Cyclical @Hedgeye TRENDs that we have been riding since June of 2020:

1. CRB Commodities Index corrected -3.0% last week to +10.0% in the last 3 months and remains Bullish TREND
2. Oil (WTI) inflated another +1.0% last week to +20.1% in the last 3 months and remains Bullish TRADE and TREND
3. Copper corrected a big -8.4% last week to +1.4% in the last 3 months = Bearish TRADE, Bullish TREND
4. Corn corrected a big -7.1% last week to +21.0% in the last 3 months = Bearish TRADE, Bullish TREND
5. Lumber corrected a big -15.2% last week to +15.5% in the last 3 months = Bearish TRADE, Bullish TREND
6. Live Cattle inflated +1.3% last week to +2.1% in the last 3 month and remains Bullish TRADE and TREND

“So”… the people who completely missed being long of A) #InflationAccelerating for the last 12 months and/or B) Commodities as an Asset Class will be the 1^st to call out “Lumber and Corn” (and the last to mention Oil or Cattle).

I can empathize with those economists and strategists, because that’s what they do. They seek numbers on the abacus that support their “deflation” narrative – they don’t know the numbers that drive the @Hedgeye Inflation Nowcasts.