While the April payrolls number - weaker than the lowest estimate - came and went, and accelerated the market's upward ascent without a glitch (now that bad news is good news again, unlike a month ago when the blow out jobs number pushed stocks higher and when good news was good news), all eyes now turn to tomorrow's CPI number, where as Goldman trader Ben Snider writes, "though GS forecast of ~0.3% is in line with consensus, there should still be market upside if the print comes in at 0.3%... This is because it would support the GS baseline outlook for a cut in July, where the market is only pricing a ~1/4 probability of a cut."

That's really the TL/DR of what to expect from the market tomorrow... with one major provision: a red-hot CPI print and the Fed will likely be unable to twist narrative expectations for a July - or even September - rate cut in time absent something big breaking (as most talking Fed heads Powell included, recently asked why would the "data dependent Fed" be cutting if inflation is again ascendant), which in turn means that the Fed would unlikely cut in 2024 as any rate cut during the July 31 meeting (really August) would be seen as too close to the November elections and would prompt howls of outrage from Trump, republicans and a majority of the population. Furthermore, should rate cuts be taken off the table, expect a collapse in risk assets, as the market realizes that unless it itself crashes, the Fed will not move.

Which is why we are rather confident that after five consecutive months of CPI printing hotter than expectations...