Daily Stock Market Recap per ZH

'Bad News' Battered Bonds, Big-Tech, & Banks On The Week; Copper & Crude Rip
FRIDAY, MAR 15, 2024 - 04:00 PM

An ugly week on the macro side - hotter than expected inflation, slower than expected growth, weaker than expected labor market data...



Source: Bloomberg

...but the inflation issues sent rate-cut expectations reeling (now less than 3 cuts priced in for 2024)...



Source: Bloomberg

And as rate-cut expectations fell, Treasury yields rose... non-stop... all week with the belly of the curve underperforming (5Y yields up 28bps on the week)...



Source: Bloomberg

Yields all ended back up near their year-to-date highs...



Source: Bloomberg

Higher yields were initially shrugged off by stocks but as they kept rising, there was no arguing...



Source: Bloomberg

Small-Caps and Big-Tech were the week's biggest losers...



Banks were not pretty this week as The Fed's BTFP facility expired...



...and liquidity was sucked hard out of the RRP. $108BN drawn down in the last two days to fresh cycle lows...



Source: Bloomberg

Anti-Obesity drug stocks dared to end red...



Source: Bloomberg

AI stocks also pumped and dumped on the week...



Source: Bloomberg

The dollar surged this week - as BoJ chatter picked up - with its best week since mid-Jan (rebounding some from last week's dollar-plungefest)....



Source: Bloomberg

The dollar's gains were gold's losses as the precious metal ended the week down 1%...



Source: Bloomberg

Despite big net inflows this week...



Source: Bloomberg

...bitcoin ended the week only marginally higher (up around 3%), with choppy moves (day-session dips bought overnight), but ened back above $70,000...



Source: Bloomberg

...and ethereum was a little worse, down around 3%, on the week (thanks to Democrats' letter overnight pressuring the SEC on ETH ETFs)...



Source: Bloomberg

NatGas erased most of last week's gains...



Source: Bloomberg

Still there were some bright spots...



Crude surged on the week, breaking out of its range to its highest since early November...



Source: Bloomberg

And as goes crude, so goes wholesale gasoline... and then goes pump prices...



Source: Bloomberg

..but it was copper that really regained its legs, surging up to its highest since Feb 2023...



Source: Bloomberg

Finally, was this week's 'stalling' in NVDA 'the top'?



Source: Bloomberg

How ironic would it be if we saw peak AI just as Jensen unveils his latest and greatest at GTC on Monday?

 

Big-Tech & Black Gold Surge As Bonds & Bitcoin Purged Ahead Of Fed
MONDAY, MAR 18, 2024 - 04:00 PM

After last week's data and down-trend, Monday started fresh and shiny for BTFDers ahead of this afternoon's "most important event in the world" - NVDA CEO Jensen Huang's Keynote at GTC.



NVDA has not made a new high since March 8th!!!! Shock horror, and sold off intraday today from earlier juicy gains... before after dip-buyers stepped in...



Nasdaq and S&P led the day with The Dow lagging and Small Caps red. The last 10 minutes saw some selling pressure spoil the party as at least some got a little nervous ahead of Jensen...



The flip-flopping of NDX/RTY continues... so tomorrow should be a RTY >> NDX day?



Source: Bloomberg

'Most Shorted' stocks opened down but were immediately squeezed - though still closed red...



Source: Bloomberg

Treasury yields were higher across the board again today with the long-end underperforming...



Source: Bloomberg

...but rate-cut expectations continued to tumble (now only 70bps of cuts priced in for 2024)...



Source: Bloomberg

...as Breakevens continue to soar (helped by oil)...



Source: Bloomberg

Bitcoin drifted lower today, back below $68,000...



Source: Bloomberg

...as BTC ETF volumes were very low...



Source: Bloomberg

The dollar extended last week's gains...



Source: Bloomberg

Despite dollar strength, gold managed gains also, back above $2160 (spot)...



Source: Bloomberg

Oil prices soared on China growth hope (macro data overnight), and Russian refinery supply issues (Ukraine drone attacks), as well as Iraq promising to abide by OPEC+ production cuts. WTI topped $83 for the first time sine the first week of November...



Source: Bloomberg

Finally, there's no way this happens again, right?



Source: Bloomberg

Over to you, Jensen!!

 

NVDA Fails To Impress, Bitcoin Battered, But Bonds & Black Gold Bid Ahead Of Fed
TUESDAY, MAR 19, 2024 - 04:00 PM

NVDA showed off a new chip and a robot... BoJ did their hawkish thing (but promised to save the world if things went to shit)... US housing data surprised to the upside... and the screens were green... but it wasn't the love-fest so many hoped as anxiety remains ahead of tomorrow's FOMC meeting...



NVDA ended the day higher barely...



Stocks overall ended higher into tomorrow's FOMC meeting, led by The Dow and Small Caps (and a late-day buying spree made things even shinier for Fed Day)...



Black Gold was the day's big winner again, with WTI surging up near $84, its highest since



Source: Bloomberg

Despite rate-cut expectations falling (hawkishly) further...



Source: Bloomberg

Bonds were bid today ahead of The Fed with the short-end outperforming...



Source: Bloomberg

Bitcoin was clubbed like a baby seal after some shenanigans on the BitMEX overnight, but did find support...



Source: Bloomberg

...which followed the largest net outflow day for BTC ETFs as someone liquidated a boat-load of GBTC...



Source: Bloomberg

The yen weakened notably post-BOJ (USDJPY rallied), roundtripping all of March's gains, and back at its weakest



Source: Bloomberg

Which was mirrored in the Dollar Index, which fully erased the post-payrolls weakness...



Source: Bloomberg

Finally, as the world and his pet rabbit anxiously await the words and dots of the The Fed tomorrow, there is a growing trade in "no cuts at all in 2024" bets...



Source: Bloomberg

How will stocks react to any hint of that?



Source: Bloomberg

Well that would get The Fed into action pretty quick... especially in an election year!

 

'Dovish' Powell Destroys 'Hawkish' Dots; Sends Stocks, Gold, & Crypto Soaring
WEDNESDAY, MAR 20, 2024 - 04:00 PM

The FOMC dropped its dot-plot and it was unequivocally more hawkish than the Dec dots with 2024 flat at 3 cuts (though more voters moved towards only 50bps), but 2025 and beyond saw rate-cuts erased from the projections...



Source: Bloomberg

Then Powell stepped up to the lectern and dropped the dovish mic on any hawkish interpretation of the dots.



Powell reiterated his long-held view that the dot-plot does not amount to a "plan".

Powell calls the longer run interest rate change "pretty modest".

“I don’t think we know that,” Powell says about whether this will be a lasting trend.

However, Powell did admit rates are unlikely to be going ZIRP anytime soon:

“I don’t see rates going back down to that level but I think there’s tremendous uncertainty on that.”

If the Fed eases too much or too soon, he says, we could see inflation come back.

And if we ease too late, we could do unnecessary harm to employment.

“We want to be careful,” Powell says, stressing that "the risks are really two-sided here."

Powell signaled balance sheet reduction will slow (less QT >> more QE):

“We did not make any decisions today. The general sense of the committee is that it’ll be appropriate to slow the pace of runoff fairly soon, consistent with the plans we previously issued.”

Powell also rather dismissed the recent jump in inflation:

“There’s reason to think that there could be seasonal effects there,” Powell says about the January CPI and PCE figures, and then says that February PCE wasn’t “terribly high.”

So, wait, the seasonally-adjusted data is showing seasonal affects now?

So uber-dovish: Brad Conger, chief investment officer at Hirtle Callaghan & Co., weighs in:

“The FOMC was on the horns of a dilemma. January and February’s inflation readings showed that progress towards the Fed’s 2% target is stagnating at best and inflecting back up at worst.

The facts called for a hawkish adjustment to reflect the slackening progress. Instead, we got a dovish adrenaline shot -- reaffirming the November pivot. The boost to financial conditions is working counter to the Fed’s price mandate. So much for Jay Powell’s presumed admiration for Paul Volcker.”

Financial Conditions are literally at the same level of 'looseness' as they were before The Fed hiking cycle began...



Source: Bloomberg

Powell had an opening to talk down the rallies and risk assets and didn’t take it. It's just unbelievable (except in an election year) that he didn’t even acknowledge the questioner’s characterization of financial conditions as having eased.

And, comically, rate-cut expectations actually (dovishly) increased today for 2024...



Source: Bloomberg

The odds of a rate-cut in June jumped to 67%...



Source: Bloomberg

And Powell's dovish dance sent assets to the moon as the dollar dived...



Source: Bloomberg

...which helped send gold soaring to a new record high...



Source: Bloomberg

...and Bitcoin broke back above $65,000...



Source: Bloomberg

Which was notable after a record net outflow from BTC ETFs yesterday...



Source: Bloomberg

Stocks soared higher - new record highs for the S&P, Dow, and Nasdaq - with Small Caps exploding to one of the best day of the year so far...



Which is funny because stocks didn't give a shit about rate-cut expectations anyway...



Source: Bloomberg

Shorts were squeezed hard today



Source: Bloomberg

...and MAG7 stocks soared to a new higher record high...



Source: Bloomberg

Treasury yields spiked on the 'Dots' then tumbled on Powell's dovishness today led by the short-end (2Y -8bps, 30Y unch)...



Source: Bloomberg

Which prompted a massive bull steepening in the yield curve...



Source: Bloomberg

Despite the weak dollar and economic excitement from The Fed's SEP, crude slipped lower on the day, back below $82 after the DOE data...



Source: Bloomberg

Finally, is this what The Fed fears?



Source: Bloomberg

Or is a Biden loss a bigger worry?



Source: Bloomberg

They tried to jawbone the big pivot/easing of rate-cut expectations and it showed no impact on Biden's approval rating, So what next? QE?

 

Stocks & The Dollar Gain On 'Good' News; Bitcoin, Bullion, & Black Gold Sink
THURSDAY, MAR 21, 2024 - 04:00 PM

Philly Fed beat, jobless claims beat, PMIs beat... but with soaring prices, Leading Indicators beat, and existing home sales beat... all good news...



Source: Bloomberg

That good news reduced expectations for rate-cuts in 2024...



Source: Bloomberg

Stocks extended yesterday's gains on the good news... but Nasdaq was hit during the day on the heels of the AAPL news...



AAPL was clubbed like a baby seal on the regulatory crackdown...



Treasuries were mixed with the short-end lagging after yesterday's outperformance, (2Y +4bps, 30Y -1bps) with only the long-end still higher in yield on the week...



Source: Bloomberg

The dollar rebounded, retracing almost all of yesterday's losses...



Source: Bloomberg

Another net outflow (3rd in a row) from BTC ETFs yesterday...



Source: Bloomberg

...and the crypto-currency was sold today...



Source: Bloomberg

Oil prices dipped for a second day - despite bond yields higher and growth being positive...



Source: Bloomberg

Gold retraced much of yesterday's spike gains...



Source: Bloomberg

Finally, which comes first: Nasdaq 17,000 or 10Y 4.0%...



Source: Bloomberg

...before or after the election?

 

'Powell Put' Sparks Surge In Stocks, Bonds, & The Dollar; Bullion & Black Gold Flat On Week
FRIDAY, MAR 22, 2024 - 04:20 PM

Positive macro, central bank love-fest, and AI catalysts... buy all the things...



US Macro 'outperformed' expectations this week amid more pro-cyclical data points...



Source: Bloomberg

...which combined with a dovish tilt by Powell (which lifted 20-24 rate-cut expectation)...



Source: Bloomberg

...and positive AI catalysts...



Source: Bloomberg

Put this all together - rates, growth, and secular momentum --and it is perhaps not surprising that stocks have reached another all-time high in the US.

Led to a solid week for all the majors with Nasdaq outperforming...



The S&P 500 trades at a 2025 P/E of 20+.

So the question may simply be: can the rates/growth/secular innovation dynamic be sustained long enough to allow corporate earnings to grow into the current market's valuation?

Shorts were aggressively squeezed Wednesday an Thursday...



Source: Bloomberg

Treasury yields ended the week lower, including the long-end (-4bps), but the short-end outperformed (-13bps)...



Source: Bloomberg

Which left the curve (2s30s) stepper on the week....



Source: Bloomberg

The dollar roared back to six week highs this week...



Source: Bloomberg

Bitcoin ETFs saw large net outflows this week...



Source: Bloomberg

And that weighed on the underlying with spot bitcoin back at $64,000...



Source: Bloomberg

Gold ended the week around unchanged, despite a hige spike intraweek to a new record high...



Source: Bloomberg

Crude prices ended the week unchanged, roundtripping from the early week gains...



Source: Bloomberg

And finally, this is not good news for Biden and his biddies...



Source: Bloomberg

Pump prices are heading up... and Biden's approval rating down at the sane tune.

 

Bitcoin, Bond Yields, & Black Gold Bounce Amid Big Auction & Bad Data
MONDAY, MAR 25, 2024 - 04:00 PM

A quiet day with some uglier than expected housing data (new home sales miss) and manufacturing (Dallas Fed survey sunk) left bond yields and black gold higher, but bitcoin stole the headlines.

The bad data prompted a dovish drift in rate-cut expectations...



Source: Bloomberg

The dovish drift sent the dollar lower...



Source: Bloomberg

And pushed gold marginally higher...



Source: Bloomberg

Bitcoin surged back above $70,000 on heavy ETF volume...



Source: Bloomberg

And we suspect the ebbing of last week's net ETF outflows switched back into inflows today...



Source: Bloomberg

Ethereum also ripped higher, back above $3600...



Source: Bloomberg

Bond yields were higher across the curve with the longer-end marginally underperforming. Selling was pretty much non-stop with a small bid into the US equity cash open and into the 2Y auction..



Source: Bloomberg

Oil prices surged as investors monitored escalating geopolitical tensions in the Middle East and Russia's war in Ukraine, while output cuts by Moscow to meet OPEC+ targets and a decline in the U.S. rig count raised concerns over a potential tightening of crude supply.



Source: Bloomberg

Small Caps outperformed on the day while The Dow lagged. The last hour saw selling pressure resume, erasing most of Small Caps' gains...



Small Caps were rocketed higher at the cash open by a mega squeeze but 'most shorted' stocks faded to almost unchanged by the close...



Source: Bloomberg

The Energy sector outperformed while Industrials and Tech lagged.

Boeing bounced higher on news that Calhoun was leaving, but that exuberance faded fast...



Mag7 stocks opened ugly, but the algos were not going to stand for that and lifted the basket to unchanged before fading late on...



Source: Bloomberg

NVDA rallied (again) but failed to take out the early March highs...



Source: Bloomberg

Finally, this is the most concentrated market ever...



Source: Bloomberg

...which is fine, right?

 

Stocks Drop As 'Soft' Data Slumps, Trump's 'Wealth' Pumps'n'Dumps
TUESDAY, MAR 26, 2024 - 04:00 PM

'Soft' data slumped today: Consumer confidence crumbled and there was a regional Fed rout - Philly Fed Services was really ugly, Richmond Fed Manufacturing was ugly, and Texas Services was negative for the 22nd straight month...

...as 'hard' data improved with durable goods orders rebounding and home prices accelerated once again (but that is offset by a decline in core shipments, which will weigh on GDP)...



Source: Bloomberg

The STIRs market focused on the bad news and pushed rate-cut expectations modestly higher (dovish)...



Source: Bloomberg

The stock market initially loved it either way - bad was good and good was good - but the majors could not hold on to their overnight highs and late-day sell programs took all the majors red on the day...



That is the 3rd down day for the S&P 500 in a row.

There were two sell programs in the last 30 mins...



Source: Bloomberg

Another day, another opening short-squeeze faded...



Source: Bloomberg

Mag7 stocks were dumped late on spoiling the party...



Source: Bloomberg

The longer-end of the bond curve outperformed today (with the short-end modestly higher in yield) with 30Y -2bps on the day, helped by a strong 5Y (record size) auction. The stronger than expected durable goods orders print snapped yields to yesterday's highs but the soft-date weakness (and the auction) wore yields lower as the day went on...



Source: Bloomberg

After yesterday's big surge (on net zero ETF inflows), bitcoin held on to the $70,000 level today...



Source: Bloomberg

The dollar ended practically unchanged, rallying back from modest weakness overnight...



Source: Bloomberg

Spot gold prices surged up to $2200 intraday before giving a lot of the gains back to end marginally higher....



Source: Bloomberg

Oil prices dipped ahead of tonight's API inventory data...



Source: Bloomberg

Finally, Trump Media & Technology Group (DJT) rocketed higher today... only to be dumped late on, erasing half of the day's gains...



Source: Bloomberg

...with the company with barely any revenues now worth almost $10BN at its peak today, according to Bloomberg data...



Source: Bloomberg

...and Trump owns 69% of it (but is unable to sell... yet).

 

Trump'n'Pump Continues As Massive Squeeze Lifts Small Caps Into Month-End; Gold Closes At Record High
WEDNESDAY, MAR 27, 2024 - 04:00 PM

The month-/quarter-end rebalance-fest continued with a giant short-squeeze offsetting the $32 billion in US equities to sell given the moves in stocks and bonds in Q1...

Stocks up large (and non-stop in Q1) while bond (prices) drifted lower (yields higher)...



Source: Bloomberg

Which may explain why bonds were bid today (given the absence of macro data), with 10Y Yields back at their lowest in two weeks...



Source: Bloomberg

Nasdaq lagged again on the day (relabalancing) but Small Caps face-ripped higher on the day. Today saw a late-day buying panic (as opposed to the last two days of dumping in the last 30 minutes) which lifted nasdaq green and small caps to a giant day...



Sell, Sell, Sell, Buy!!!!



Thanks in large part to a gigantic short-squeeze - the biggest low-to-high rip for 'most shorted' stocks since the end of February...



Source: Bloomberg

Mag7 stocks staged a very late-day comeback today to close green barely...



Source: Bloomberg

And Trump-mania continued with DJT up another 15% today...



Yesterday saw a big resurgent net inflow (over $417mm) into BTC ETFs...



Source: Bloomberg

And that helped lift bitcoin early on but SEC vs COIN headlines prompted some selling which was immediately pounced upon by futures sellers, dragging bitcoin back below $69,000...



Source: Bloomberg

Away from the headlines that are usually front and center on CNBC, the FX market had quite a day as USDJPY tested a key level and was desperately jawboned by every Japanese official that could fog a mirror that "we'll do something really big, don't make us!!".

152 is the weakest for the yen against the dollar since 1990... and is the same level that prompted intervention in 2022...



Source: Bloomberg

It may not look like much but that level is make or break and Tokyo knows it.

But the dollar looked like it did nothing on the day...



Source: Bloomberg

Oil prices rebounded on the day, erasing the post-API losses (as official data came in with a much smaller build)...



Source: Bloomberg

Gold continues to drift higher, testing back up towards $2200 today...



Source: Bloomberg

But closing at a record high in USD...



Source: Bloomberg

Finally, if you're Japanese, gold has been a great bet...



Source: Bloomberg

...and so has bitcoin...



Source: Bloomberg

...protection from government incompetence.

 

Stocks, Gold, & Crypto Soar In Q1 Despite Rout In Rate-Cut Expectations
THURSDAY, MAR 28, 2024 - 04:00 PM

Q1 macro was characterized by a vast divergence between 'soft' surveys crashing as 'hard' data drifting higher...



Source: Bloomberg

The strong 'hard' data - and sticky inflation - along with endless jawboning, drove rate-hike expectations drastically lower in Q1. 2024 expectations for The Fed crashed from almost seven cuts to less than three...



Source: Bloomberg

...and stocks did not even blink!



Source: Bloomberg

With the S&P 500 surging to its best start to a year since 2019 (outperforming Nasdaq)...



Source: Bloomberg

That's the 5th green month in a row...



Source: Bloomberg

And stocks are up for 18 of the last 22 weeks (it hasn't done more than that since 1989)...



Source: Bloomberg

Notably, and perhaps surprisingly, Q1's best performing sector was not tech... it was Energy (with Real Estate the only sector red in Q1). In fact in March, Energy stocks are up 10% while Tech is unchanged...



Source: Bloomberg

Some have argued that Q1's market strength reflects a growing belief that Republicans will win in November...



Source: Bloomberg

And don't let anyone tell you this has not been a multiple expansion - tech is now back at over 28x - its post-dot-com bust highs...



Source: Bloomberg

MTUM (momentum) saw its best start to a year... ever....



Source: Bloomberg

In fact, as Goldman shows in the chart below, High Beta Momo - the big Q1 outperformer - reversed its laggard performance in 2023...



Thematically, Bitcoin-Sensitive stocks, AI stocks, and anti-obesity drug stocks all outperformed in Q1, continuing the trend of 2023 gains...



AI-related stocks soared 24% in Q1 while stocks at risk from AI fell around 3% in Q1...



Source: Bloomberg

Anti-Obesity stocks soared in Q1, actually outperforming AI stocks and even GLP-1-at-risk stocks (e.g. WW) managed gains in Q1...



Source: Bloomberg

'Magnificent 7' stocks added a stunning $1.7 trillion in market cap in Q1...



Source: Bloomberg

Notably, the implied vol of the Mag7 is once again very elevated relative to the implied vol of the S&P 500. In July of last year, this signaled a big reversal (demand for hedges). In Jan of this year, it was a signal of chasers buying levered bets on the upside. What does it mean this time?



Source: Bloomberg

The strength in stocks and credit has dominated any rise in yields and crushed financial conditions to their loosest since before The Fed started their rate-hiking cycle...



Source: Bloomberg

US Treasuries were dumped in Q1 as rate-cut expectations plunged with the short-end modestly underperforming...



Source: Bloomberg

And while survey-based inflation expectations (UMich) are sliding, the market's expectation for inflation is anything but...



Source: Bloomberg

The dollar rallied in Q1, erasing around half of the Q4 losses...



Source: Bloomberg

The dollar's strength was supported by yen weakness as the Japanese currency plunged to its weakest since 1990...



Source: Bloomberg

Not to be outdone, the yuan also tumbled in Q1...



Source: Bloomberg

Q1 was dominated by bitcoin headlines - as the newly minted ETFs saw unprecedented inflows...



Source: Bloomberg

Which helped push Bitcoin to a new record high (in USD)...



Source: Bloomberg

Ethereum also soared in Q1 (up 55%) but Solana outperformed...



Source: Bloomberg

Another alternate currency - gold - also soared to a new record high in Q1...



Source: Bloomberg

And just when you thought NVDA was the big winner, Cocoa hyperinflates in Q1, up 135% YTD!



Source: Bloomberg

Oil, wholesale gasoline, and pump-prices all ripped higher in Q1 (especially March)...



Source: Bloomberg

Finally, as Goldman's Chris Hussey notes, it's times like these – when 'everything is awesome' – when it is best to assess the risks that swirl around the investment landscape. Here are a few to consider:

• A strong economic landing becomes a hard landing;
  
  
• Inflation is sticky, not transitory, and the Fed pushes back;
  
  
• The pandemic stimulus surge turns out not to be 'cost-less';
  
  
• Concentration raises 'key company' risk;
  
  
• Elections and geo-political risks.

And as a reminder, we've seen these 'everything is awesome' moments before...



Source: Bloomberg

And they never end well.

 

Gold Hits New Record Highs, Bonds Battered As Inflation Fears Reignite
MONDAY, APR 01, 2024 - 04:00 PM

The macro picture was not great for the doves today...



On a day dominated by the illiquidity of absent European markets still celebrating Easter, the Manufacturing survey headline data was mixed (ISM turned positve) but the prices components were very much not mixed - both signaling soaring costs and prices being passed on to consumers at the fastest pace in 18 months. As an aside, The Cleveland Fed's CPI NOWCAST is starting to accelerate meaningfully once again...



Source: Bloomberg

The one redeeming 'bad news' datapoint was an unexpected plunge in construction-spending (its second monthly decline in a row and the biggest MoM drop since Oct 2022) but the market was focused on the inflationary aspect of PMIs, sending June rate-cut odds back below 50%...



Source: Bloomberg

Bonds were battered today - again amid an illiquid market - with yields up 10-12bps



Source: Bloomberg

...that was among the worst (upward) yield moves for the long-end in the last 18 months...



Source: Bloomberg

...Pushing yields back up to the highs of the year...



Source: Bloomberg

And the higher yields actually hurt stocks (admittedly only a bit) for a change...



Source: Bloomberg

...with Small Caps and The Dow the worst performers. Futures all opened with decent upside on Sunday night (closed since Thursday pre-PCE), but only Nasdaq managed to cling to very modestly green on the day. A little late-day meltup put a little lipstiick on another wise pig of a day for most stocks...



Before we leave equity-land, we note that DJT took a tumble today, erasing its post-SPAC gains...



The dollar broke out of its recent range back near the highs of the year...



Source: Bloomberg

And while the dollar was stronger, gold managed to hold gains on the day, spiking to a new record high at $2265...



Source: Bloomberg

Israeli strikes in Iran and more drone strikes prompted oil prices to jump to new cycle highs (WTI $84.50) as geopolitical risk premia rise (highest since Oct 2023)...



Source: Bloomberg

Bitcoin had another wild ride, surging up near record highs overnight, sliding intraday as Asia closed and as US equity markets opened, then bouncing back off $68,000...



Source: Bloomberg

Perpetual futures were once again the driver of the downswsings (as we likely see the continued trend of dump in futs and pump in ETFs)...





Finally, it's worth noting US Tax day is April 15th. As Goldman's John Flood noted earlier, seasonality will likely come into play here as the retail community tends to sell stocks into 4/15 to raise cash for these payments...



Source: Goldman Sachs

Post payments we have historically seen a bullish trend develop... So BTFD today, STFR on April 9th, then BTFD on April 17th...

 

Gold Hits Another New Record High But Bonds, Stocks, & Bitcoin Battered On 'Good' News
TUESDAY, APR 02, 2024 - 04:00 PM

Mixed (well good) data this morning - in-line JOLTS (labor market shows no signs of cracking), stronger than expected Factory orders, but weaker than expected durable goods (final) and shipments data actually shrank in Feb (bad for GDP) - had no major impact on rate-cut expectations (which remain low - 67bps total cuts in 2024, 50% odds of June cut). US macro surprise data is picking up (and overnight saw European PMIs better than expected)...



Source: Bloomberg

But Fed's Mester sung from the same hymn-sheet as Waller and Bostic, saying that The Fed needs more time to make the 'cut' call:

“But I need to see more data to raise my confidence,” Mester said Tuesday in prepared remarks for an event at the Cleveland Fed.

“Some further monthly readings will give us a better sense of whether the disinflation process is stalling out or whether the start-of-the-year readings reflect a temporary detour on the downward path back to price stability.”

And then she explained her view of Fed asymmetry:

“At this point, I think the bigger risk would be to begin reducing the funds rate too early,” Mester said.

“And with labor markets and economic growth both being very solid, we do not need to take that risk.”

And while Mester's comments did not seem to be an immediate catalyst, yields kept rising overnight (on stronger EU PMIs?), especially at the long-end (2Y unch, 30Y +6bps) extending yesterday's bloodbathery...



Source: Bloomberg

The 10Y broke above its YTD highs to its highest since Nov 2023 (2nd biggest 2-day jump in yields since October)



Source: Bloomberg

...and steepening the yield curve (2s30s) significantly...



Source: Bloomberg

And stocks appeared to run out of momentum again overnight as yields rose during the European session with Small Caps extending losses in the US session. The last hour saw a mini buying spree which put a little lipstick on the day's pig. Small Caps were the biggest losers...



'Most Shorted' stocks were clubbed like a baby seal for the second day in a row... the biggest 2-day drop in the shortest stocks since November...



Source: Bloomberg

The dollar tumbled, erasing most of yesterday's gains...



Source: Bloomberg

Bitcoin took a big tumble today, with reports that the alleged 'Silk Road' wallet moved 30,175 bitcoins to a Coinbase wallet (perhaps priming for a sale).



Source: Bloomberg

We note that the last time this wallet - in March 2023 - was a serious BTFD opportunity...



Source: Bloomberg

Also of note, the players in the perp futs market have been very active the last couple of days (all but one of the heavy volume surges were sells)...



Ethereum was worse... taking the ETH/BTC ratio down to its lowest since April 2021...



Source: Bloomberg

But while one 'alternative' currency is tumbling, another (older one) is rallying to new record highs... Spot Gold hit $2277 intraday - a new record high....



Source: Bloomberg

For a change, Silver outperformed gold today, with spot prices surging up to $26 for the first time since May 2023...



Source: Bloomberg

And Black Gold also surged up above $85 (WTI) - the highest since Oct 2023...



Source: Bloomberg

Finally, as growth expectations have stagnated somewhat over the past year (though the last week has seen some positive surprises), Citi's inflation-suprise index has resurged back to its highest since Dec 2022...



Source: Bloomberg

...we love the smell of stagflation in the morning... and gold is rising along with Fed policy-error-risk.

 

Gold Closes At Record High For 5th Straight Day, Dollar Dumps As Bond Bloodbath Stalls
WEDNESDAY, APR 03, 2024 - 04:00 PM

Another mixed bag of data today - something for everyone - ADP showed better job gains than expected (but wage growth soared, re-igniting inflation fears). S&P Global's Services PMI dropped (but prices paid soared) and ISM Services PMI also dropped (notably more than expected) while Manufacturing rose yesterday.

But the market only had eyes for one thing - the plunge in prices paid in ISM Services (which literally diverged from all other recent 'prices paid' surveys and the respondents' comments)...



Source: Bloomberg

For context, that is the biggest two-month plunge in ISM Services Prices Paid since Dec 2008...



Source: Bloomberg

That one datapoint was all the algos needed and stocks rallied, the dollar and bond yields dropped, gold spiked to new highs, bitcoin jumped higher, and even rate-cut hopes rose immediately (but still less than 3 total rate-cuts priced in for 2024)...



Source: Bloomberg

Small Cap stocks loved the 'dovishness' of lower prices paid (and Powell didn't offer much either way) and along with Nasdaq and the S&P ended the day green.

“On inflation, it is too soon to say whether the recent readings represent more than just a bump,” Mr. Powell stated.

“We do not expect that it will be appropriate to lower our policy rate until we have greater confidence that inflation is moving sustainably down toward 2 percent.”

At the same time, he said that cuts to the benchmark federal funds rate are “likely to be appropriate at some point this year” as he does not believe “inflation is reversing higher.”

Then, at 1515ET, a huge sell program suddenly hit stocks out of nowhere...



Source: Bloomberg

It appeared to be triggered by this HL - *APPLE EXPLORES HOME ROBOTS AS ‘NEXT BIG THING’ AFTER CAR FAILS - which sent AAPL sharply lower immediately...



We guess the trading bots don't like competition?

And that spoiled the party overall for stonks but they bounced back from that shock. Quite a crazy day - although small moves in the bigger picture. The Dow ended red and is on target for its worst week since October...



Notably, the S&P bounced perfectly at the lows from the 3/20 FOMC meeting spike...



While the broad market was up today, Disney was not - after Iger won in the fight against Trian...



Treasury yields were higher once again overnight but the ISM prices paid data sent them back down to basically end the day unch-ish (2Y -1bp, 30Y +1bp)...



Source: Bloomberg

The yield curve (2s30s) continues to steepen...



Source: Bloomberg

The dollar dived back to one-week lows...



Source: Bloomberg

And that helped send gold to its fifth record closing high in a row, within pennies of $2300 (spot)...



Source: Bloomberg

Crude prices rallied for the fifth day in a row, with WTI topping $86



Source: Bloomberg

Positioning is once again very long in Brent futures...



Source: Bloomberg

Finally, as gold pushes to record-er and record-er highs (in USD terms), Real yields refuse to play along...



Source: Bloomberg

Whatever gold is worrying about... is big.

 

Bonds & Bitcoin Bid As Kashkari & Crude Slam Stocks
THURSDAY, APR 04, 2024 - 04:00 PM

An armada of FedSpeak today was pretty much all in the same direction - need more time on inflation, no rush to cut (but will cut), jobs strong - with the only divergence being the degree (Gooslbee, more dovishly worried about labor market due to rising delinquencies; to Kashkari, more hawkishly questioning any need to cut rates at all given how economy is doing).

In order of their appearance:

• *BARR: BANKS' OFFICE COMMERCIAL REAL-ESTATE ISSUES TO TAKE TIME
  
  
• *KUGLER: `SOME LOWERING' OF RATES THIS YEAR LIKELY APPROPRIATE
  
  
• *FED'S HARKER SAYS INFLATION IS STILL TOO HIGH
  
  
• *BARKIN: FED HAS TIME TO GAIN MORE CLARITY BEFORE LOWERING RATES
  
  
• *GOOLSBEE: WORTH STAYING ATTUNED TO DETERIORATION IN JOBS MARKET
  
  
• *KASHKARI: QUESTION OF WHY CUT RATES IF ECONOMY REMAINS STRONG
  
  
• *MESTER: NEED MORE PROGRESS ON HOUSING, CORE SERVICES INFLATION

Everything was going swimmingly early on. Stocks saw jobless claims data and algos greenlit the buying panic (read all about the farce that is jobless claims here).

The gains survived the various Fed speakers early on until Kashkari spoke and hinted at the potential of no rate-cuts and that seemed to trigger a wave of selling in stocks.

“In March I had jotted down two rate cuts this year if inflation continues to fall back towards our 2% target,” Kashkari said in a virtual event with LinkedIn on Thursday.

“If we continue to see inflation moving sideways, then that would make me question whether we needed to do those rate cuts at all.”



The decline in stocks also corresponded with a surge in oil prices driven by headlines around UAE cutting ties with Israel and Israel putting all of its global embassies on alert...



Source: Bloomberg

WTI topped $87 intraday...



Source: Bloomberg

Brent also topped $91 for the first time since Oct 2023...



Source: Bloomberg

It was an ugly day overall in stocks (among the ugliest in a while) with everything sliding from gains near 1% to losses near 1.5%. Nasdaq was the laggard (but basically everything was dumped together)... Small Caps and The Dow are down over 3% on the week..



"Most Shorted" stocks were monkey-hammered...



Source: Bloomberg

...and MAG7 stocks were pummeled after a strong open...



Source: Bloomberg

Everything fell at the same time - around the crossover of Kashkari's comments and oil's spike but we note that bond yields also tumbled (odd given oil's rise - inflation - and Kashkari's comments, hawkish)...



Source: Bloomberg

Are bonds suddenly fearful of an oil-price-spike-induced recession? Rate-cut expectations also rose (back to 3 cuts in 2024)...



Source: Bloomberg

Also suggesting this was more an oil story than a Fed story.

Crypto had a huge day, erasing all of Tuesday's tumble, back above $69,000...



Source: Bloomberg

Gold hit a new record high for the sixth day in a row, above $2300 (spot) for the first time before selling off late in the day...



Source: Bloomberg

As crude soared today, so wholesale gasoline prices hit their highest level in seven months, leading pump prices ever higher...



Source: Bloomberg

Finally, which comes first? S&P 4800 or 10Y 3.5%?



Source: Bloomberg

We suspect we will see whether this mini-reversal is sustained after 0830ET tomorrow morning.

 

Oil & Gold Soar On Week, But 'Good Data' Wrecks Rate-Cut Hopes, Slamming Stocks & Bonds
FRIDAY, APR 05, 2024 - 04:00 PM

It was a 'good' week for macro data...



Source: Bloomberg

...but 'soft' survey data remains mired in depression as the 'aggregate' hard data holds strong...



Source: Bloomberg

Of course, good news is bad news for the doves and rate-cut expectations for 2024 are down (particularly after today's big payrolls headline beat) well below three cuts expected by the 'median' Fed dot...



Source: Bloomberg

...and the odds of a cut in June have tumbled back to a coin-toss...



Source: Bloomberg

And to rub salt in the wounds of the doves, inflation expectations are back on the rise bigly...



Source: Bloomberg

Stocks initially down-pumped on the hjobs data (good is bad) then went into their usual BTFD insanity, ramping Nasdaq to unchanged vs Wenesday's close (erasing yesterday's losses). However, within minutes of that FedSpeak spoiled the party again:

1310ET *FED'S BOWMAN: INFLATION PROGRESS HAS STALLED, WON'T BE COMFORTABLE CUTTING UNTIL DISINFLATION RETURNS

And stocks started back lower...



On the week, all the majors were red with Small Caps and The Dow the worst performers. This was the S&P 500's worst week since the first week of the year...



MAG7 stocks managed to eke out very modest gains as a basket on the week...



Source: Bloomberg

Energy stocks soared this week (to a record high) - the only sector to end green - while Healthcare and Real Estate lagged...



Source: Bloomberg

VIX saw its biggest weekly surge since August 2023...



Source: Bloomberg

Bonds were also ugly on the week, led by the long-end...



Source: Bloomberg

The 2Y Yield pushed up to 2024 YTD highs and closed at its highest yield since November...



Source: Bloomberg

The Dollar ended a choppy week modestly lower after spiking initially today into the green...



Source: Bloomberg

Interestingly, since The BoJ unleashed chaos in JPY-land, USDJPY has gone too sleep. @Bespoke notes that this is the smallest 13-day range for USDJPY since 1980...



Source: Bloomberg

Gold had another huge week, rallying to a new record high above $2330 (spot). Gold is up 9 of the last 10 days and 6 of the last 7 weeks...



Source: Bloomberg

Gold is screaming that something bad is coming (inferring negative real yields - something we have only seen deep in crises)...



Source: Bloomberg

Oil prices also surged, with Brent topping $90 and WTI topping $87.50 this week, as gepolitical tensions turned the rhetoric up to '11'...



Source: Bloomberg

And strength in oil meant gasoline and pump prices rose too...



Source: Bloomberg

Bitcoin was down on the week, but found support at $65,000 and bounced back amid a re-ignition of net ETF inflows...



Source: Bloomberg

Ethereum underperformed on the week, breaking down to its weakest against bitcoin since May 2021...



Source: Bloomberg

Finally, with all the macro and geopolitical headlines, everyone seems to have forgotten about the whole premise for this rally was AI and wunderstock NVDA which is down 11% from its record highs one-month ago...



Source: Bloomberg

History rhymes...

 

Bitcoin & Bullion Back Near Record Highs As Rate-Cut Bets Battered
MONDAY, APR 08, 2024 - 04:00 PM

Ahead of the event risk of CPI, PPI, and FOMC Minutes this week, stocks ambled along while the STIRs market eviscerated more rate-cut hope, sending Treasury yields higher and gold and crypto also soared amid 'policy error' fears and geopolitical tensions.

VIX is certainly primed for some action this week (and then to return to normal)...



Source: Bloomberg

Rate-cut expectations for June fell back below 50%...



Source: Bloomberg

...and the market is now pricing in only 62bps of cuts in 2024...



Source: Bloomberg

As 'No Landing'/Reflation starts to dominate the 'Soft Landing' narrative...



Source: Bloomberg

Treasuries were mixed today with the long-end outperforming (2Y +4bps, 30Y unch)...



Source: Bloomberg

...which flattened the yield curve (2s30s)...



Source: Bloomberg

Stocks, broadly speaking, went nowhere today, except for Small Caps which pumped and dumped and pumped around the cash open. A late-day selloff made things worse...



Interestingly, 0-DTE traders fought the good fight today, buying calls aggressively into the equity market decline around lunchtime. While it stalled the decline, it did not prompt a rebound...



Source: SpotGamma

The MAG7 stock basket went nowhere on the day...



Source: Bloomberg

'Most Shorted' stocks squeezed higher at the open and then went deadstick for the rest of the day...



Source: Bloomberg

The dollar fell back towards Thursday's lows today, after spiking back up on Friday's payrolls print...



Source: Bloomberg

Bitcoin soared back near record highs today nearing $73,000...



Source: Bloomberg

But, Ethereum (back above $3700) has dramatically outperformed Bitcoin in the last few days ...



Source: Bloomberg

...having bounced off critical support...



Source: Bloomberg

...Perhaps as hope of an imminent ETH ETF re-awakens...

Spot Gold prices topped $2350 overnight - a new record high - amid a frenzy of Chinese interest...



Source: Bloomberg

Oil prices fell overnight amid headlines that Israel was pulling troops out of Gaza but that quickly reversed on reality that it was a small withdrawal and then Bibi confirmed a data for an attack on Rafah...



Source: Bloomberg

Finally, when will rates matter?



Source: Bloomberg

Maybe after this week's Fed Minutes spoil the party?

 

Markets Suffer Conniptions Ahead Of Crucial Consumer Price Print
TUESDAY, APR 09, 2024 - 04:00 PM

Weird day... no macro, no FedSpeak, no notable geopolitical malarkey and yet, markets had a conniption (early on)...

VIX spiked up, modestly reminiscent of last Thursday's manic episode (but we note that the market is implying just a +/-0.8/0.9% implied move in the S&P 500 to tomorrow's close)...



Source: Bloomberg

Stocks puked early (and dip-buyers stepped in). With around 30 mins left in the day Fed's Bostic said some shit and the market went into panic-bid mode. You decide if it made sense to rip higher:

• *BOSTIC: IF JOB DATA SIGNALS PAIN TO COME, OPEN TO EARLIER CUTS
  
  
• *BOSTIC: IF DISINFLATION PACE RESUMES, COULD PULL CUTS FORWARD
  
  
• *BOSTIC: CPI COMING IN AT CONSENSUS WOULD BE WELCOME DEVELOPMENT
  
  
• *BOSTIC: POSSIBLE MAY NEED TO DELAY CUTS "EVEN FURTHER OUT"
  

Seems like exactly more of the same 'data-dependent' crap from The Fed, but as you can see the algos loved it. That fit of buying lifted Small Caps and Nasdaq green (and S&P at the death)...



We note that 0-DTE traders were putting down-pressure on markets from the cash open (with heavy put-buying), then the early 0-DTE call-buyers capitulated (which snapped stocks lower around 1030ET). The rest of the day saw call-buyers return and 0-DTE flow flat on the put-side...



Source: SpotGamma

The basket of MAG7 stocks was monkey-hammered at around that time and never really recovered...



Source: Bloomberg

Also of note, AI stocks have gone nowhere (well they've gone down) for the last six weeks...



Source: Bloomberg

Of course, it didn't help that Boeing shit the bed again on whistleblower warnings about the 787...



Away from stocks, crypto crashed with Bitcoin erasing all of yesterday's gains and some...



Source: Bloomberg

Crude was clubbed like a baby seal after WTI tagged $87 to the tick overnight...



Source: Bloomberg

Amid all this, Treasuries were bid with the long-end modestly outperforming (30Y -6bps, 2Y -4.5bps). Yields are down notably from yesterday's highs...



Source: Bloomberg

With the 30Y Yield having erased all of the post-payrolls spike now...



Source: Bloomberg

The dollar was weaker overnight but jumped higher as the market conniptions struck early on to end modestly higher...



Source: Bloomberg

But, amid all that, rate-cut expectations actually improved notably on the day...



Source: Bloomberg

Despite dollar gains, gold managed to hit new record highs once again at $2365...



Source: Bloomberg

Finally, for everyone anxious about a hot print tomorrow...



Source: Bloomberg

...there, that should help calm any fears.

 

'All Bets Are Off' - Market-Mayhem After Consumer Prices Crush Dovish-Dreams
WEDNESDAY, APR 10, 2024 - 04:00 PM

Borrowing a phrase from one of our favorite movies "all bets are off" after this morning's hot-hot-hot CPI print

The fourth hotter-than-expected core inflation report in a row got investors reevaluating expectations around the Fed's first rate cut...



Source: Bloomberg

Goldman's Diana Asatryan noted that their Research group pushed its first rate cut forecast to July from June, expecting two cuts this year.

The market is now pricing in just 38bps (1.5 rate-cuts) in 2024...



Source: Bloomberg

But do not worry, President Biden promised a rate-cut:

And that all sparked a massive surge in TSY yields with the short-end/belly underperforming (2Y +22bps, 30Y +13bps)...



Source: Bloomberg

The 2Y Yield got within a tick of 5.00% today for the first time since mid-Nov...



Source: Bloomberg

The 10Y Yield was double-buggered as a really ugly auction added another leg to the sell-off...



Source: Bloomberg

Today was the biggest yield jump for the 10Y since Sept 2022, 2Y's biggest absolute jump since March 2023.



Source: Bloomberg

The 5Y TSY Yield broke higher than the 30Y yield today (inverted) for the first time since September...



Source: Bloomberg

Inflation expectations surged to a new cycle high (its highest since June 2022)...



Source: Bloomberg

Small Caps (as you'd expect, most sensitive to rates) were the day's biggest laggards (-3.25%) with the rest of the majors down together around 1-1.5%...



Real Estate stocks suffered the most today (smashed over 4% lower with homebuilders worst day since Oct) as only Energy stocks managed gains...



Source: Bloomberg

And as also makes sense - 'most shorted' stocks (heavily weighted to small caps) - was clubbed like a baby seal...



Source: Bloomberg

Small Caps (IWM) closed below their 50DMA for the first time since November...



Source: Bloomberg

Interestingly, the MAG7 basket of stocks was practically unchanged on the day as the early puke was bid back...



Source: Bloomberg

...with NVDA seemingly the new 'safety' trade as TSYs were dumped...



The dollar soared on the (less dovish and maybe hawkish) CPI print to its highest close since Nov 2023...



Source: Bloomberg

The Bank of Japan has a real problem now as USDJPY surged up to 153 - a fresh 34-year-low for the yen against the dollar and below the level at which the BoJ last intervened...



Source: Bloomberg

Gold prices fell on the day - amid dollar gains - but we do note that the initial puke in precious metals was quickly bid back up before fading later...



Source: Bloomberg

Oil prices bucked the trend today thanks to a spike in geopolitical tensions. The initial dump on CPI was worsened by a bigger than expected crude draw but then Iran-Israel missile headlines sent prices soaring back above $86 (WTI)...



Source: Bloomberg

And that won't help gas prices...



Source: Bloomberg

Finally, this gaping wide crocodile's mouth is getting ready to snap shut again...



Source: Bloomberg

When will rates matter again?

And don't forget, its that time of the month/year again...



Will the tax on 'gains' from last year spook sellers more this year as rate-cuts are wiped off the table?

 

Stocks Surge, Goldgasms To Record High After "Adjusted" PPI Sparks Buying Frenzy
THURSDAY, APR 11, 2024 - 03:59 PM

What started off as another ugly day with stocks tumbling and yields surging following yesterday's VaR-shock inducing CPI print, quickly reversed after the market - in its infinite stupidity - took what was a hot PPI print (core PPI came in at 2.4% vs Exp. 2.2% and up from 2.0%) but which the Biden BLS massaged just enough to make it appear that headline PPI actually missed (coming at 2.1% vs exp 2.2%), on what we earlier showed was blatant (and literal) gaslighting, with the entire miss the result of seasonal adjustments to gasoline prices which "dropped" by 3.6% even though they actually rose 6.3% to the highest price in 6 months.



And while anyone with half a brain could quickly see through the PPI bezzle, that clearly did not apply to the algos, such as this one...



... who instead ramped spoos and even though a few of them realized just how stupid the initial move had been and dumped the early kneejerk ramp, the remainder - even dumber - went with the flow and shortly after the cash open, stocks went on one of their trademark diagonal ramps higher...



... or maybe it wasn't the algos, but rather 0DTE mean-reversion momos, who took advantage of the reversal in the first post-PPI kneejerk move and ramped momentum up in a one-way all day trade, via both 0DTE and total option delta, which was enough to drag the broader market higher.



The meltup was facilitated by low volumes (top of book liquidity dropped to $8.8MM, down 33% from the 5DMA), with Mega cap Tech (+115bps), 12M Winners (+107bps), and AI related names (+84bps) all at the top of the screens today, vs 12M Losers (-64bps) & Rate-sensitives Fins (-51bps) in the red.

One consequence of today's meltup is that stonks which had until recently been left for dead, like AAPL, enjoyed their best day in almost a year: indeed, AAPL's 4% gain at session highs, was the best intraday performance in over a year...



... and while traditionally AAPL had been used a "carry-trade" funder for other Mag 7 longs, today that was not the case, with NVDA also surging more than 3%, following a similar gain yesterday...



.. as the AI revolution leader came dangerously close to tripping both the 50DMA (at $818) yesterday, and the critical rising support line.



It wasn't just the Mag7s that saw a flood of buying: investors also rushed for what has become the darling trade in recent weeks, gold, which surged to a fresh all time high above $2,370.



And while many have said it's only a matter of time before gold restraces most of its recent gains, Pepperstone's Michael Brown points out that - just like with Bitcoin - there is "still no real spike in news/headline coverage as seen during previous rallies in recent times." Translation: the move can go on for longer until the euphoria finally sets in.



Taking a step back, the market heatmap was a familiar one: overall momentum names exploded higher once again in a desperate attempt to recapture the fading glory of January and February...



... while mega tech quietly breaks out to a new 2024 high vs unprofitable tech, while the HF VIP names less the most shorted names are barely up on the year.



... while the classical cyclical sectors - energy, banks, healthcare - lagged once again.



A closer look at some sector level highlights:

• Consumer: KVUE: Big move (-4%) on a sell initiation. Feedback from most is story is clearly not perfect, with some organic sales whiffs since coming public, which has kept many on the sidelines, but pushback to an outright sell rating given the valuation/level. Goldman's desk is very active in this one.
• TMT: SEMIS ACTIVE- MRVL -2% in focus amidst AI event...traded 1mm+ 2-ways yesterday. other Semis flow + px action mixed w/ MRVL event ongoing. Still seeing demand in QUALITY cohort although magnitude is less than yesterday... Seeing buy tix early in GOOG/L & AMZN
• RV: ALPN the focus today. A quick turnaround from a rumored deal yesterday to a definitive situation overnight with Vertex acquiring the business in a nearly $5bn transaction (67% premium; ~4.8x 2023 consensus sales). The transaction is expected to trade fairly tight to deal terms.

It is possible that one catalyst behind today's meltup is to avoid what could be a cascade lower: as Goldman writes in its mid-day market recap, "CTA trigger levels continue to be back in focus.. short term = 5130, med term = 4862, long term = 4607. Over the next 1 month, CTA's are large sellers of a down tape ($201.5B)." Naturally, the best way to prevent CTAs from selling is to prevent stocks from dropping the first place...

In this context, we found this stat from Goldman Prime interesting: Yesterday’s notional short selling in Macro Products was the largest in over 3 years. ETF shorts increased +4.3%, the largest 1-day increase since Feb '23. Translation: we were this close to the bottom falling off from below the market.

Yet one place where there was little buying interest is arguably the most important asset for the market: 10Y yields rose as high as 4.59 and continue to trade in the redzone. Any breakout here and the next stop is 4.75%,



Some more stats from Goldman's trading desk (full analysis available to pro subs):

• Volumes tracking -7% vs the 20dma with macro volumes higher for the second day in a row, capturing 32% of the overall tape.
• The floor is skewed -3% better for sale, with HF’s leading the way (-5.8% net sellers). HF’s are selling HC and Consumer Discretionary names, + interesting to note their ETF’s short ratio continues to be very elevated, at 75%. HF’s are buying Info Tech.
• LO’s are also skewed -2% better for sale, led by Supply in HC, Info Tech, and Macro Products. They are buyers of Consumer Discretionary but overall notional across the group is very light.

And with today's pandemonium in the books, we now await the official start of earnings season tomorrow when the big banks report Q1 results.

 

Gold & The Dollar Surged This Week, Stocks & Crypto Purged As Reflation & WW3-Risk Wreck Rate-Cut Hopes
FRIDAY, APR 12, 2024 - 04:00 PM

Inflation fears/promises/threats were realized this week with CPI and PPI hot (yes PPI) and UMich infl exp rising too. Inflation data has been surprising to the upside all year and growth data not so much...



...and that rising inflation expectation wrecked the hopes and dreams of the doves this week, smashing expectations for The Fed to less than two total cuts in 2024 now priced in...



Source: Bloomberg

And even the armada of Fed Speakers launched today spoke as one...

• *FED'S COLLINS: NOW SEE FED CUTTING LATER THAN PREVIOUSLY THOUGHT
  
  
• *FED'S GOOLSBEE: IF PCE REINFLATES, 'WE WILL STABILIZE THE PRICES'
  
  
• *FED'S SCHMID: REASON TO THINK RATES WILL STAY HIGHER FOR LONGER
  
  
• *FED'S BOSTIC: `I AM NOT IN A HURRY' TO CUT INTEREST RATES
  
  
• *FED'S DALY: NO URGENCY TO CUT INTEREST RATES

Even with today's sudden slam-down, gold was impressive this week - interestingly rallying along with the USDollar on the week. Stocks were spanked but had a wild ride and today saw Bitcoin & Black Gold monkey-hammered (for no good reason)...



Source: Bloomberg

Stocks really did have a wild ride this week, plunging on CPI (wrecking the narrative), then rallying on a PPI print that was anything but dovish (as the algos took hold), only to get monkey-hammered today as ammo ran out and WW3 risks re0ignioted amid 'imminent' threats between Iran and Israel over attacks. By the end, all the US majors were back at the lows of the week, led by Small Caps and The Dow...



The S&P 500 suffered its worst weekly loss since October (second week lower in a row) and closed at one-month lows, while the median stock closed at two-month lows...



Source: Bloomberg

Energy stocks - which were the only sector green on the week as of last night's close - were unceremoniously dumped today as all S&P sectors ended red with Financials the biggest losers (not a great day for JPM today)...



Source: Bloomberg

Notably, Goldman's trading desk highlights the fact that The Magnificent 7 collectively have been net bought by hedge funds for a second straight week on the Prime book (following 6 straight weeks of net selling), suggesting a renewed focus on quality and balance sheet strength into the Q1 earnings season...



Source: Bloomberg

The group now makes up 19.6% of total US single stock Net exposure on the Prime book, up sharply from the YTD low of 16.9% in early March and approaching the record level of ~20% seen last summer...



Source: Goldman Sachs

Treasuries were bid today (yields down and stocks down) with yields down around 7-9bps across the board. On the week though, yields were higher, led by the short-end/belly of the curve. Obviously the big move was around CPI on Wednesday...



Source: Bloomberg

The dollar roared higher this week (its biggest weekly gain since Sept 2022) to its highest since Nov 2023...



Source: Bloomberg

Crypto was clubbed like a baby seal today, with Bitcoin erasing the week's gains and then some...



Source: Bloomberg

...and once again, the selling pressure was initiated from the perp futs markets....



Ethereum was even worse with ETH/BTC plunging back below recent support (which is also January support) to its lowest since April 2021...



Source: Bloomberg

Some one was definitely not happy about the message that gold was sending this week and Benoit Gilson stomped on spot prices this afternoon after the precious metal soared to new record highs...



Source: Bloomberg

Silver outperformed Gold for the second week in a row, back to its strongest relative to gold since November...



Source: Bloomberg

...surging relative to gold early on today, before the big reversal...



Source: Bloomberg

Crude prices also had a wild ride this week amid "WW3-on / WW3-off" headlines...



Source: Bloomberg

Finally, after the quarter-end surge in RRP usage, the liquidity withdrawals continue, falling to new cycle lows today, barely above $400BN...



Source: Bloomberg

Is it any wonder The Fed is rapidly looking to taper QT?