Soaring Stocks Break 100-Year-Record Losing-Streak Amid Macro Meltdown

US Macro data has disappointed for 6 straight weeks with May set to see the biggest plunge in reported data relative to expectations since the collapse in April 2020 when the economy was effectively shuttered down by the government…

Source: Bloomberg

But it appears that bad news is good news once again (with ugly data, FedSpeak, and the Minutes all being interpreted as 2x 50bps hikes then pause in Sept… which just seems too easy) as after seven (or eight for The Dow) straight weeks lower for the Nasdaq and S&P, this week saw stocks ‘dead cat bounce’, soaring higher led by Nasdaq (the worst performer on the downside swing). Nasdaq is up 10% off last Friday’s lows, Small Caps and S&P +9% and Dow +8%…

Just look at today’s moves, Nasdaq +3%, S&P up over 2% all triggered at 0830ET when Core PCE came in as expected (and headline PCE was hotter than expected?!) and then extended gains on the terrible UMich print with inflation expectations hovering at 40 year highs…

Explained by the total and utter lack of liquidity in markets…

The ramp this week lifted all but the Nasdaq into the green for the month…

However, even after this week’s rally, the Tech sector within the S&P 500 is down almost 20% ytd. And the average stock in the FAAMG+T complex (mega-cap Tech) has lost about 23% of its value this year.

“Most Shorted” stocks exploded higher off Tuesday’s puke, up over 15% from those lows (this was the biggest short-squeeze week since the late March meltup)

Source: Bloomberg

FANG Stocks soared this week to a critical level…

Source: Bloomberg

…it appears they “turned the machines back on…”

While Consumer Discretionary has been the best performing sector in the S&P 500 and Tech the third best, Energy has been the second best performer this week – a beneficiary, perhaps, of improving sentiment around China. All sectors were green with Utes and Healthcare having big weeks too…

Source: Bloomberg

Since the FOMC Minutes, bonds and stocks have both been bid…

Source: Bloomberg

As it seems the market is now buying back into the belief that The Fed will fold like a cheap lawnchair way before it said it would. This week saw rate-hike expectations tumble and subsequent rate-cut expectations rise…

Source: Bloomberg

It seems stocks caught down to STIR pricing for rate-hikes and bounced along with dovish shift in rates…

Source: Bloomberg

Treasury yields are lower on the week with 30Y the laggard (managing to hold modestly lower) as the short-end tumbled…

Source: Bloomberg

30Y closed below 3.00%…

Source: Bloomberg

The dollar fell significantly for the second week in a row, closing at 6-week lows…

Source: Bloomberg

This is the biggest two-week drop in the dollar since June 2020

Cryptos had an ugly week (again) with Ethereum the biggest loser (and Bitcoin relatively outperforming)…

Source: Bloomberg

ETH/BTC slipped down to key support…

Source: Bloomberg

Perhaps most notable on the week was crypto’s decoupling from big-tech with correlation crashing…

Source: Bloomberg

Oil prices soared this week, nearing 11-week highs (post-Putin highs) and well above Biden-SPR levels with WTI back above $115…

And as oil soars so gas prices at the pump soar-erer even more…

Gold and Silver managed gains on the week back above $1850 and $22 respectively…

Finally, we note that financial conditions bounced higher this week after the FOMC Minutes, finding support at what has been historically a ‘tightness’ that has sparked Fed flip-flops in the past…

Source: Bloomberg

Will The Fed even hike again?