Below is a chart and brief excerpt from today's Early Look written by Macro analyst Christian Drake. 

Macro phase transitions are not priced in overnight.  There is plenty of 2nd mouse opportunity with respect to shifting or building exposure.

As it relates to the reflationary outlook I wanted to summarily highlight dynamics on the price side as the convolution associated with pandemic distortions  

The (global) fallout from the largest negative macro shock in a century was broadly disinflationary, layering cyclical pressure atop (still) entrenched structural forces (debt, demographics, globalization, tech innovation and oligopoly pricing, etc).

But large-scale pandemic related distortions have pervaded the price data for months as the impact of demand-supply imbalances for stay-at-home products/services accelerated.

While moderating, these idiosyncratic distortions remain evident and continue (and will continue) to shape the reported headline figures.

For example, consider price growth for durable goods relative to nondurables in the chart below. 

Durables price growth – which include things like furniture, appliances and vehicles – represents items which saw outsized demand, outsized supply constraints or both.  

The Inventory-to-Sales ratio’s reflect the same reality while suggesting continued solidity in near-term production and some measure of persistence in prevailing price trends.  

CHART OF THE DAY: CPI | Durables vs NonDurables - COD 1