Stocks & Bonds Slammed As Dimon Warns “You’d Better Brace Yourself”
US equity and bond markets just lurched lower (in price) and the dollar spiked higher as a combination of headlines hit.
Stagflationary signals from manufacturing surveys – inflation is sticky and degrowth is not slowing it
Bank of Canada hike – CAD yields spike knocking into USTs
JOLTS printed super strong – Fed has more work to do
JPMorgan’s Jamie Dimon warned on the economy, “It’s a hurricane, you’d better brace yourself.”
oh and Fed QT started today.
Put all that together and equities tumbled…
Treasury yields spiked…
With the short-end getting hammered, flattening the yield curve…
And the dollar surged…
For now most desks are focusing on Dimon’s comments and the potential ‘worsening’ of them in the last week:
Looking ahead, “we’re bracing ourselves,” Dimon said, referring to risks such as the Russian invasion of Ukraine.
At a previous conference, he called those risks “storm clouds,” now he’s saying, “It’s a hurricane. That hurricane is right there, down the road, and coming our way. We don’t know if it’s a minor storm or if it’s a Superstorm Sandy.”
Dimon’s comments follow Wells Fargo’s CEO warning this morning that higher interest rates mean the economy has to slow, and that a soft-landing scenario was hard to achieve.
Finally, we also note that Fed’s Biostic walked back his September “pause” comments, clarifying that this is in no way menat to be a “Fed Put”.
Wed, 06/01/2022 – 10:19