The stock market is ripping this morning despite disappointing earnings reported by some of the S&P 500's MegaCaps this week. Why? Consider the following:
(1) Today's inflation reports (for the ECI and PCED) suggest that it is peaking, though not for sure.
(2) Inflation-adjusted consumer spending continues to move higher albeit slowly and led by services as spending on goods has flattened in recent months (chart).
(3) The big, but unsurprising shocker is the plunge in pending existing home sales during September (chart). The housing market is in a severe recession.