Don’t be fooled by the hotter-than-expected consumer price inflation, or CPI, report for January. It is a head fake. Inflation is falling. The Federal Reserve will cut interest rates soon. Corporate profits are growing at a slightly faster-than-expected rate.

Equities remain attractive for investors. Save for Tesla, the so-called Magnificent 7 — Alphabet, Amazon, Apple, Microsoft, Meta, and Nvidia — also remain attractive. The noted companies are growing earnings and revenues many times faster than their peers in the S&P 500 index. The S&P 500, excluding the Magnificent 7, is selling at a price-to-earnings ratio of about 17, slightly below the five-year valuation average.