Finance

Stocks, Bonds, Gold, & Cryptos Extend Gains As White House Confirms 'Fed Pivot'

Stocks, Bonds, Gold, & Cryptos Extend Gains As White House Confirms ‘Fed Pivot’

Deese, Biden, and Yellen all proclaimed: “nope” when questioned whether today’s consecutive negative GDP print means recession…

…harkening back to jobs data ‘we cannot have a recession with such a strong jobs market’. Ironic then that today also saw initial jobless claims weaken to their worst in 8 months…

Source: Bloomberg

Oh, and then there’s this…

And this…

…ok, and this…

But hey, we’re not biologists, so how would we know if we are in recession or not?

Did anyone notice EU consumer confidence hit a record low today and German inflation unexpectedly re-accelerated today? European macro data is at its weakest (ex COVID lockdowns) since the Great Financial Crisis…

Probably nothing, right? …won;t drag the US down further, right?

Meanwhile, the Democrats continued to browbeat Powell into being dovish today with Powell throwing The Fed under the bus for “fighting inflation” and slowing the economy and Biden economic advisor Jared Bernstein presumptively closing in an interview with MSNBC claiming that “The Fed’s monetary policy pivot is completely appropriate.”

The market has adjusted dovishly, leaving less than 90bps more hikes priced-in for the rest of the year (and a surge in rate-cut expectations after that)…

Source: Bloomberg

Will Powell push back against that? The market is now massively more dovish than The Fed’s last dotplot which Powell specifically called out as worth watching yesterday…

Source: Bloomberg

Well he has a lot of time until J-Hole…

Meanwhile, for a brief moment after the cash equity open, it appeared today was going to mirror the last two FOMC statement market moves with a big surge followed by a bigger puke…

Source: Bloomberg

But that dip was bought aggressively just before Nasdaq erased all post-Fed gains as the FOMO Capitulation we warned of struck hard… The US Majors are all up around 2-3% post-FOMC-statement now…

With S&P seemingly finding strong support at 4,000 once again…

After yesterday’s short-squeeze, this morning saw “most shorted” stocks puke back all their gains before a panic bid squeeze re-appared around the European close…

Source: Bloomberg

Stocks were not alone in the buying-panic.

Bonds were aggressively bid (after the recessionary print) with the belly of the curve dramatically outperforming today (2Y -10bps, 5Y -13bps, 30Y -6bps). The long-bond is now unch over the last two days with the 5Y yield down 20bps…

Source: Bloomberg

The 10Y Yield puked to its lowest since mid-April…

Source: Bloomberg

Bitcoin soared back above $24,000…

Source: Bloomberg

Ethereum soared back above $1700 – its highest since early June…

Source: Bloomberg

Notably Ethereum has erased all its recent underperformance relative to bitcoin…

Source: Bloomberg

The dollar chopped around today but ended lower, extending yesterday’s dovish puke (to its lowest since 7/5)…

Source: Bloomberg

Gold ripped back above $1750…

Oil prices rollercoastered today with WTI ripping up towards $100 before sliding back into the red below $97…

Finally, despite the fact that tomorrow we get The Fed’s traditional favorite inflation indicator (PCE Deflator) and The Fed’s most recent favorite inflation indicator (UMich inflation expectations), hedges were abandoned today with VIX dropping to a 22 handle…

Has this squeeze and ‘over-hedged’ unwind run its course?

And one more thing – who gives a flying fuck if the word ‘recession’ is being used – Americans’ (Adjusted) Misery Index is at its worst level since Jimmy Carter was president…

Source: Bloomberg

And if everything was so ‘not recession’-like – why would consumer sentiment and presidential approval ratings be at record lows?

Tyler Durden
Thu, 07/28/2022 – 16:00

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