Market Bears DEMAND Inflation

What if they're wrong again....

Author

Tim Vollans
August 12, 2025

Another CPI day.

Another day of tariff fears.

And another day of us, asking if the doomers are wrong (again)…

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Macro: CPI in Focus, Services Inflation Key

The whole market is transfixed by today’s US CPI. The worry: an upside surprise in core or services inflation especially from tariffs could push out expected Fed cuts and hit equities.

Consensus expects a 0.3% print; anything hotter, especially if services join goods in accelerating, will spook markets.

Otherwise, a benign print keeps the rally alive.

Bulls are hunting for confirmation that the Fed’s (as yet unconfirmed) cut bias will hold.

A ‘miss’ could be the push needed for new highs.

Charlie at Nomura has the best CPI preview this month. We added some emphasis.

I think “in-line” Core print of 0.3ish is fine for Equities, although the permutations matter:

if the increases in Goods –inflation are Tariff-centric areas, but Services remain manageable, we’re solid for status quo extension of “Transitory Tariff Inflation” = still solidly deep-enough “Fed cutting cycle” potential, as Labor is quite obviously normalizing and giving them ample room from current claims of “restrictive” (LOL)

However, if Services are behind an outlier portion of the Core upside, the Stock market may indeed worry about getting the cuts they’ve recently been “promised,” and we could get a wobble in light of the Systematic and Retail “Long” exposure as potential de-risking flow into a selloff

 

Meanwhile, UK labour data was mixed but highlighted private sector wage weakness and continued jobs cooling, reinforcing the idea of sterling shorts as the Bank of England’s hawkish bias looks misjudged.

Flows & Sector Moves: Quality Leads, Speculation Surfaces

Crypto flows are fuelling risk-seeking, with weaker retail “meme” favourites and liquid shorts starting to outperform in tandem.

Tech remains the market’s ancho. Micron’s guidance boost and SK Hynix’s strong memory-market outlook support persistent AI hardware optimism.

That was followed by news that Texas Instruments are hiking prices…

Oklo’s sharp earnings ‘miss’ and underlying lack of revenue show the difficulty in valuing speculative, pre-earnings plays.

By contrast, trend winners like Reddit (Yes, I will keep banging this drum) are still running, while Bloom Energy holds its trend.

Oklo Disappoints, Micron Confirms

Oklo’s earnings miss underscores the dangers in chasing hype.

No revenue, no approvals, and launch still years away. The high-flying nuclear story is speculative at best, even with Air Force and data centre partnerships.

Yet we can never know how far the market will run with a narrative…

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Tesla Breaks Out, Trend Resumes

Yesterday’s action lacked fireworks, but Tesla stood out with a strong break from its compression pattern, now clearing previous highs.

The move is all about technical momentum rather than fresh fundamentals.

Buzz around robo-taxi licences is simply fuelling market attention.

Strategy: Wait for CPI, Don’t Chase Dips

With CPI risk front and centre, there’s little edge in overcommitting ahead of today’s print.

The path of least resistance remains higher, but volatility is lurking, a hot inflation result (especially >0.4%) will see stocks wobble.

Goldman

FOMO is rising, as many pros trail year-to-date returns and would be forced to chase any extension.

Focus on established trend leaders, avoid “cheap” speculative longs unless tape confirms.

Positioning Pulse: Flows Cool, Risks Get Selective

Buyback windows are opening, adding some support, but CTA tailwinds are lessening.

Most sector moves were marginal yesterday, except for some tech and momentum names.

Watch for signs of forced chasing or de-risking post-CPI, and keep an eye on flows into and out of speculative and meme names.

This daily note is only a glimpse of what we talk about every single day in the Fink Community.

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