Goldilocks or gouging shorts…
Robust Manufacturing unit Orders, a tumble in Unit Labor Prices (and stronger productiveness), Preliminary Claims in line (however Persevering with Claims at six-month highs) – all point out, as Goldman’s Chris Hussey notes, that the labor market is therapeutic properly, and illustrating how a key driver of inflation (wages) is probably going properly on a path in the direction of normalization… which, together with the Treasury Refunding ‘good’ information, crashed the yield curve (because the long-end dramatically outperformed)…
Supply: Bloomberg
The 2Y yield was truly larger on the day (2Y +4bps, 30Y -10bps), however nonetheless notably decrease because the Treasury Refunding ‘good’ information (2Y -10bps, 30Y -28bps)…
Supply: Bloomberg
The 10Y and 30Y pushed on under 5% because the 2Y yield moved again up in the direction of 5%…(NOTE – the 20Y yield is the one a part of the curve that is still above- very marginally – 5.00%)…
Supply: Bloomberg
However, none of that mattered for shares because the squeeze was in, sending the whole lot hovering – particularly the most-shorted and longest-duration as yields additionally plunged.
A ‘face-ripper’ of a rally within the most-shorted shares – the largest squeeze since February… (that’s an 8% rally from the FOMC assertion yesterday)
Supply: Bloomberg
…smashed the Nasdaq up 4% from the Treasury Refunding. Small Caps and the S&P are up nearly 3.5% and The Dow up over 2.5%…
Nasdaq is up 5 days in a row on tempo for its greatest week since Nov 2022.
The Nasdaq and S&P 500 prolonged their features right this moment again above the 200DMAs. The Dow’s features took it completely to its 200DMA and the Russell 2000 stays properly under it…
An odd mixture of the whole lot in sectors with decrease yields snapping Utes and Actual Property larger together with Tech and Discretionary…
Supply: Bloomberg
Banks (giant and small) surged on the day…
…as Invoice Gross known as the underside in regional banks and despatched tehm upo nearly 6% (however nonetheless again to SVB spike lows solely)…
No particular person inventory higher sums up right this moment’s fairness market than PTON, which crashed over 15% within the pre-market solely to blow up larger to be up greater than 15% on the day…
VIX was clubbed like a child seal again all the way down to a 15 deal with…
Earlier than we go away equity-land, it’s price noting that 0-DTE merchants aggressively fought the squeeze larger right this moment…
Supply: SpotGamma
The greenback prolonged yesterday’s plunge (largest every day drop since Sept eleventh), on tempo for its largest weekly drop since July…
Supply: Bloomberg
Bitcoin examined up in the direction of $36,000 in a single day however slid decrease on the day, discovering assist at $34,500…
Supply: Bloomberg
Regardless of the greenback’s dive, gold solely managed modest features on the day…
Supply: Bloomberg
Crude costs rebounded right this moment with WTI discovering assist round $80 and bouncing again as much as pre-Israel ranges…
Supply: Bloomberg
Lastly, simply as we warned yesterday, Powell’s press convention was just a bit too ‘dovish’ (or non-hawkish) and has triggered a buying-panic in bonds and shares and credit score (spreads compressed). What does that every one imply – monetary situations have began to ease considerably…
Supply: Bloomberg
…so the market has reflexively reacted to Powell’s appreciation of its “tightening monetary situations” by easing monetary situations… forcing Powell and his buddies again into hawkish mode (and round we go).
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