The stock market and retail investors are celebrating an end to inflation worries prematurely on Tuesday, and the big money is not playing along, according to Larry McDonald of “The Bear Traps Report,” whose clients are some of the biggest hedge funds on the planet.
There was already something off with the way financial markets were reacting to the July CPI report with the 10-year Treasury yield going higher after the numbers, while the Dow Jones Industrial average is rallying.
Big institutional money on Wall Street is siding with the bond market and believes that inside of the CPI report were the signs of a growing comeback in inflation. They are looking at what’s called “supercore” inflation, which removes food and energy, but also shelter and rent costs from the headline number.
Source: https://www.cnbc.com/2025/08/12/stocks-are-celebrating-inflations-demise-prematurely-says-larry-mcdonald.html