Wage Inflation

Wall Street hates wage inflation...

...because the Fed hates wage inflation.

The BLS report just showed November average hourly earnings rose 0.4% -- twice the 0.2% expected, and 300% higher than the previous 0.1%.

Average weekly earnings increased 2.4%, the largest since August 2013.

Markets seem confounded. Gold and oil are down. Treasuries yield are up.

The DXY and the yen are in a race to break multi-year swing points. The yen is winning thus far. 124.130 is the yen level from 2007, and 89.62 is the DXY level.

Bottom line is that today's news gives the Fed the added impetus to raise rates sooner.

I remember wage inflation creeping in back in 2000. I remember one of my friends being concerned about it. He owns a very large car dealership and employs a lot of people.

I had dinner with him and his wife last night.

"People are buying cars left and right. It's crazy, " he told me. But then he said, "It's time to sell. Sell the whole damn thing. It's always like this at the top of the car market."

Any new high today has me looking for SPY and OEX puts, VIX calls, and possibly more UVXY.