Hopefully, you have seen my thesis that inflation is in the process of peaking. Notice, I didn’t say it peaked. The process has begun. That’s high conviction and what I going with until proven otherwise. If I am correct we will see this unfold in various sectors and asset classes, like commodities, industrials, materials, energy and bonds.
For the past week I have not had strong conviction that the mild, barely discernible pullback was over and I still don’t. Sentiment is crazy greedy and giddy, but market internals and momentum remain strong. Expect this theme to be in place, perhaps into 2022. While overall seasonal trends are very positive right into January, there is a mild soft patch right about now. Again, if some weakness appears, I don’t expect it to be much and I would use it to add risk.
