Seinfeld Economics; TINSTAAFL

"There ain't no such thing as a free lunch"

The current market is making a mockery of seemingly obsolete concepts about how markets work, where good news is good news, bad news is good news, no news is good news, and then sometimes horrendous news is interpreted as great news anyway. It seems like there is a permanently new regime.

But then we see gasoline futures making their highest print since July 2022, gauging the UGA ETF, as that chart breaks out from a tight weekly base spanning quarters, and it reminds us of TINSTAAFL, one of the very first concepts I learned in middle school economics. 

A robust American spending consumer and an equities market which will not quit now means higher prices at the pump, as it should. And then we have the SPR refill issues on top of everything going on with OPEC+ and Russia. 

Hence, it is hard not to think that The Fed is toying with fire here, given their June pause, when it comes to needing to start hiking again going forward beyond next week's FOMC where they are fully expected now to hike 25 bps. Once again, equities are not pricing in the idea of The Fed scrambling to play catch-up, which is a blunder equities made before in 2022. 

With the bar exceptionally high headed into NFLX TSLA earnings tonight, then Options Expirations on Friday, one ugly surprise is all it should take now to see an abrupt about-face in this historically complacent and euphoric market.