Stocks & Gold Gain, Dollar Pain As ‘Soft Landing’ Narrative Implodes

Another day, another disappointing set of macro data that curb-stomps the ‘soft-landing’ narrative as US Macro Surprise Index just suffered its biggest 9-day decline since May 2022…

Source: Bloomberg

Specifically, the suddenly disappointing labor market data has sent rate-change expectations plunging below pre-Powell-Jackson-Hole levels…

Source: Bloomberg

The market is now pricing in 110bps of rate-cuts in 2024…

Source: Bloomberg

Treasury yields had a volatile day – swinging from up around 4bps to down around 6bps, as ADP disappointed (and GDP didn’t help). By the close, a rather unusual event occurred with the entire curve ending practically unchanged on the day…

Source: Bloomberg

The 2Y Yield tumbled intraday to basically unchanged on the month, back into the range of the early payrolls and CPI moves…

Source: Bloomberg

The lower yields and dovish drift in STIRs sent long-duration stocks higher. Nasdaq led the day (Dow lagged but was still green). NOTE there was quite a oump and dump after the cash open but the pain trade is higher for now…

For context, this recent rebound has the S&P and Nasdaq back up to only being down around 2% on the month. Small Caps are still down 5%…

Source: Bloomberg

‘Most shorted’ stocks saw a 4th day in a row with an opening squeeze push, but again with little follow-through…

Source: Bloomberg

NVDA extended its bounce, but was unable to breach $500 – its Call Wall – and reversed at that resistance…

The dollar slipped lower once again, back to two week lows, but still up nicely

Source: Bloomberg

Bitcoin gave back some of yesterday’s SEC-GBTC win gains, but found support around $27,000…

Source: Bloomberg

Gold continues its charge back towards unchanged on the month, nearing $1950 (spot) intraday today…

Source: Bloomberg

Oil prices ended higher today, with WTI tagging $82 intraday. Another slam-down attempt struck shortly after the inventory data showed crude stocks at their lowest since Dec 2022…

Finally, as Bloomberg’s Simon White notes, stocks’ rally in response to bad economic news might be short lived as there is plenty of room to catch down to burgeoning recession risks…

Source: Bloomberg

With low volatility, more instability, and pricing that is not expectant of a near-term recession, risks are mounting for equities.