So much for Wall Street coming to its senses over inflation.
After Tuesday's CPI showed consumer inflation increasing at a 3.8% annual rate and Wednesday's April PPI shoving the inflation agenda further up the chain with this sobering comment from the BLS...
The Producer Price Index for final demand increased 1.4 percent in April, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Final demand prices advanced 0.7 percent in March and 0.6 percent in February. The April increase is the largest advance since rising 1.7 percent in March 2022. On an unadjusted basis, the index for final demand rose 6.0 percent for the 12 months ended in April, the largest 12-month increase since moving up 6.4 percent in December 2022.
... stocks opened to the downside but continued rallying the rest of the session after the big money guys had a goo 15-minute laugh. Shorts, as usual, were carried out on stretchers after one of the more quintessential head fakes in recent days. While the Dow and NYSE Composite finished in the red, their hues were more like the blush of a pink rose than fire truck tone by the end of the session.
More and more money flowed into tech stocks with the NASDAQ and S&P indices posting record highs. The Shiller PE ended the day at 42.32.
There isn't even a hint of pullback or correction in the charts or the general optimism. Stocks have to go up. The stock market is about the only thing on which the president, Republicans, tech bros., and the MAGA folks can hang their hats. Everything else, from Iran to inflation, to employment has, or is about to go tits up. Despite the continuing destruction of the empire, stocks save the day, every day, and will be expected to do so until there comes a rug pull, or, possibly, forever.
With the 30-year bond yielding 5.03% for two days running and the 10-year note yield stuck at 4.46, the perception is that stocks have become essential to survival. Yields go up, bond prices go down. Investors are finally demanding consummate return on their long-term risk profiles. The only surprising thing about five percent on the 30-year is that it's taken so long to get there.
The U.S., via its best carnival barker's tweets and threats, on the surface appears to be doing just fine. A peek under the hood, so to speak, reveals busted pipes and a sputtering industrial motor that's low on oil and in need of massive repair. Major infrastructure in the U.S. is aging and hasn't been sufficiently upgraded in decades. Asian countries are advancing. The West, ever so slowly, is committing suicide by a thousand cuts.
As the opening bell approaches, the Washington/Wall Street narrative seems to be holding. After all, isn't the president in China, telling Xi Jinping and anybody within earshot what a great poker hand he's playing? Bluffing won't work with China... or Russia... or even Iran. There are a lot of undercurrents advancing on the stock con. The U.S. stopped issuing a public measure of the underground economy in the 1980s. This laughable article estimates it at five percent of GDP in the U.S. when it's probably more like 25%, especially considering the GDP numbers are largely government spending and full up on pork and bunk. During the prohibition era of the 1920s, the underground economy was larger than the "above-board" official economy.
Governments everywhere, at the local, state and federal level, need to institute more new taxes and raise rates on those that already exist to see just how compliant Americans might be. Sooner or later, milking the same cow without offering it better feed ends up dry well. It will give, right up until it doesn't.
Run more deficits, borrow more money, abuse the population. FAFO.
At the Close, Wednesday, May 13, 2026:
Dow: 49,693.20, -67.36 (-0.14%)
NASDAQ: 26,402.34, +314.14 (+1.20%)
S&P 500: 7,444.25, +43.29 (+0.58%)
NYSE Composite: 22,973.56, -41.79 (-0.18%)
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