Micro Trumps Macro As Stocks Shrug Off Week Of Higher Inflation, Higher Rates, & Lower Growth

It was an ugly macro week…

Source: Bloomberg

…and worse still, ‘growth’ surprises disappointed significantly while ‘inflation’ surprises surprised to the upside significantly…

Source: Bloomberg

Soaring inflation expectations sent rate-cut expectations to new cycle lows…

Source: Bloomberg

…pushing yields higher across the board (led by the long-end)…

Source: Bloomberg

But, stocks didn’t care about any of that because a handful of mega-cap tech stocks’ earnings were awesome (except META) – and that’s what matters (for now)…

Source: Bloomberg

Nasdaq outperformed, up 4% on the week (its best week since the start of Nov 2023). The Dow was the laggard on the week but all the majors had a decent week…

Not the best week for some observers…

Traders 1: Marko 0 https://t.co/T6PHjRSrMF

— zerohedge (@zerohedge) April 26, 2024

This week saw the biggest short-squeeze since the first week of March…

Source: Bloomberg

And the basket of Magnificent 7 stocks soared over 5% this week, its best week since the first week of November (Fed Pivot) – but it was noisy as TSLA surged, META tumbled, and then GOOGL/MSFT lifted the lid…

Source: Bloomberg

Tech and Discretionary outperformed on the week with Energy and Materials lagging (but all sectors ended the week green)…

Source: Bloomberg

5.00% remains the Maginot Line for the 2Y Yield…

Source: Bloomberg

Interestingly, the dollar ended the week practically unchanged – despite a lot of noise…

Source: Bloomberg

…despite the seventh straight week of declines in the yen vs the dollar as it appears the BoJ and MoF have given up…

Source: Bloomberg

Gold was dumped this week – its worst week since the start of December 2023. Spot prices did find support at $2300 though…

Source: Bloomberg

After two down weeks, oil prices rallied this week, with WTI back above $83…

Source: Bloomberg

Finally, intraday volatility has picked up dramatically in the last couple of weeks…

Source: Bloomberg

…as the distribution of possible rate outcomes has picked up significantly. Don’t forget next week’s QRA and FOMC as Yellen and Powell get ‘back to work’.