IT'S IMPOSSIBLE TO OVERSTATE DEFLATIONARY PRESSURES:

In a new bull market, you tend to see things like housing, airline, copper, and industrial stocks lead the rally. Meanwhile, energy, utility, and healthcare stocks tend to lag. 

That's exactly what we're seeing today. 

Year-to-date, industrial stocks are up 5%. Housing stocks are up 10%. Copper stocks jumped 16%, and airline stocks are up a whopping 18%. Meanwhile, energy stocks are up less than 3%. Utility stocks have risen less than 2%, and healthcare stocks have gone nowhere.

A graph following the change in the current rally's leading and lagging stocks

That's typical "new bull market" price action. 

We are seeing this price action because the incoming economic data is strongly suggesting that inflation is dying. 

Inflation is the enemy of the stock market. Typically, when it rises sharply, stocks plummet. Conversely, when inflation falls sharply, stocks tend to rocket. 

Inflation is collapsing right now. 

Yesterday, we learned that in December, consumer prices fell month-over-month. They dropped 0.1% from November. Monthly drops in the consumer price index are exceptionally rare. They only happen about once every few years. But when they do, they always signal that inflation is dying. 

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