Unexpectedly hot CPI and PPI ushered in the return of utilities, another rise in Treasury yields and, more importantly, a mini spike in volatility. That’s the one thing that’s been missing from this market for months. If volatility manages to sustain here, it’s likely to spill over into virtually every risk asset class and make March look like a potentially rough ride for investors.

The S&P 500 netted its first close above the 5000 mark, but this is still a market being driven heavily by tech & growth on nearly a weekly basis. The only difference is that small-caps led the way higher, but it may only be a one week thing. An eventual flight to safety trade triggered by a significant credit event still feels like a likely outcome.

All four signals move to risk-on this week, reflecting the market that’s been dominated by the return of mega-caps, tech and growth stocks. Last Friday’s non-farm payroll number may have given the impression of strength in the labor market, but other measures suggest that we’re in the early stages of a labor market turnaround.