A Chequer-Board of Nights and Days

Maybe it can see its way towards easing off of interest rates now that this report has come out:

Wall Street barreled higher again Friday after the week's most anticipated economic reading indicated that inflation excluding the price of gas remained tepid last month, easing some concerns that have jolted stock and bond markets in recent sessions. The Dow Jones industrial average advanced about 100 points, nearing its record trading high.

The consumer price index showed prices rose at the fastest pace in 20 months in May as the cost of gas jumped. However, the so-called core personal consumption price index, which excludes often volatile food and energy prices, rose a lower-than-expected 0.1 percent. The figure, which the inflation-wary Federal Reserve watches closely, was below the 0.2 percent increase Wall Street expected.

The yield on the benchmark 10-year Treasury note fell to 5.20 percent Friday from 5.23 percent late Thursday after release of the CPI report helped ease emergent concerns that the Fed might raise rather than lower interest rates this year.

The notion of a rate hike gained traction last week when inflation concerns sent the yield on the 10-year note above 5 percent for the first time since last summer. Subsequent spikes in bond yields, which move in the opposite direction as prices, roiled stock markets last week and early this week.

Friday's session follows a two-day surge in stocks that arrived as inflation worries eased. Friday could see added volatility because of the expiration of four types of options contracts -- an occurrence known as quadruple witching.

"Today's numbers showed us that the little spook we had last week and earlier this week was misplaced," said Rob Lutts, president and chief investment officer at Cabot Money Management Inc.

In midday trading, the Dow jumped 104.70, or 0.77 percent, to 13,658.42.

And what will help us further in the fight against inflation? Globalization will! You know, the socioeconomic force that causes all the kids to go out and smash Starbucks stores even though they have absolutely no conception whatsoever what globalization entails:

Lutts contends concerns about inflation have been overblown and that increased trade and further intertwining of world economies will stave off major spikes in prices.

"What you're getting is a contribution of hundreds of millions of lower-cost workers coming into our economy. It's very positive for all economic activity."

Splendid. Today, I will savor my venti cappuccino and my shortbread cookies from the great green god with particular fervor.