Bonds & Bullion Jump, Big-Tech & The Buck Slump, Black Gold Dumps

Productivity (higher) and unit labor costs (lower) prompted a panic-bid in stocks, bonds, and gold early on today that held across the cash equity open, but only bonds and gold held their gains as the yield curve prices in a deeper and deeper recession as imminent (and for now, EPS expectations have not priced in anything other than the softest of soft-landings).

Nasdaq was the laggard today (despite tumbling yields) and the Dow managed to end almost unchanged…

All the majors remain below pre-Powell-pump levels…

The S&P 500 stalled its freefall at the 100-day moving-average…

Before we leave equity land, we have one word… Carvanage… Bonds are pricing in an ugly bankruptcy

Perhaps just as notably, stocks were unable to rally today even as the market’s expectations for The Fed’s rate trajectory shifted notably more dovishly. The market is now pricing in a terminal rate below 5.00% (in May 2023) and 50bps of rate-cuts in H2 2023…

Source: Bloomberg

Treasuries were aggressively bid today with the entire curve down around 12-13bps (even more from the earlier spike highs). Since Powell’s address last week, 30Y Yields are down almost 40bps (2Y yields are down just over 20bps)…

Source: Bloomberg

The 10Y Yield is now down 100bps from the Oct cycle highs…

Source: Bloomberg

30Y yields tumbled below 3.50% to their lowest in 3 months…

Source: Bloomberg

3.00% for the 30Y is the next one to watch as it drops back to its multi-decade down-trend-line…

Source: Bloomberg

The dollar fell back today after 2 up-days, having stalled at the pre-Powell levels…

Source: Bloomberg

Meanwhile, there was a coup in Peru which sent the Sol reeling only for it to be bid right back up…

Source: Bloomberg

Bitcoin tried and failed to break out above $17,000, ending the day lower…

Source: Bloomberg

Brent crude fell to a $76 handle – erasing all of 2022’s gains…

Source: Bloomberg

WTI crashed to a $71 handle after major product builds suggest demand is starting to suffer significantly…

Gold rallied back above $1800 today…

Finally, as we noted earlier, the last couple of weeks have seen a dramatic shift in the night- vs day-session performance of the US equity market…

Which when combined with a lack of significant options flow, has the distinct aroma of large and coordinated stock liquidations.