Putin Kills Goldilocks: Stocks Slammed As Russia Wrecks Dove’s Dreams

Today’s price action was bought to you by the word “Goldilocks” and the number ‘Zero‘.

Goldilocks was the word thrown around by all asunder with regard to the labor market data today – most especially a drop in wage growth – which prompted a dovish response from markets (who apparently are unable to remember what Jay Powell said just last week).

Just to steal the jam out of goldilocks’ donut, we do note that hours worked continued to tumble – not a good sign – sending up recession-risk flares left and right…

Source: Bloomberg

And the number Zero is the amount of Russian gas that Putin will allow to flow to Europe through Nord Stream 1 after ‘coincidentally’ finding an oil leak and keeping the crucial pipeline closed (just after G-7 agreed on the completely unworkable Russian oil-price cap scheme)

That all sent rate-hike odds tumbling, with the odds of a 75bps hike this month dropping from 75% to 55%…

Source: Bloomberg

Powell will be pleased though as financial conditions have tightened significantly back to the tightest of the cycle after the Fed Pivot easing…

Source: Bloomberg

On the day, everything was awesome after the jobs data… until the European close (low liquidity) when stocks tanked as Gazprom ‘coincidentally’ found an oil leak and said it would keep the gas pipeline closed for longer. Nasdaq went from Secretariat to the glue factory in a few brief minutes…