Bullion, Bitcoin, & Black Gold Battered But Sanguine CPI Slams Leaves Stocks & Bonds Confused

Inflation ‘surprise’ data continues to drift back lower (at February lows after this morning’s CPI) but more problematically macro growth ‘surprise’ data is hovering near COVID lockdown lows…

Source: Bloomberg

…and it is that potential growth scare that is dominating traders’ minds as they reduce rate-cut expectations…

Source: Bloomberg

Markets are confused…

… Small Caps up, Dow down; Short-end of yield curve higher in yield, long-end lower; dollar flat as rate expectations slide; growthy Mag7 stocks rally while growthy commodities tumble…

Source: Bloomberg

…and gold and crypto slammed with dollar unch (though gold seemed to see this coming way early)…

Source: Bloomberg

…and distracted…

…as Kamala’s prediction market odds are now 12 pts above Trump’s…

Source: Bloomberg

By the end of the day, The Dow was up, Small Caps down, Nasdaq unch… until a late-day panic-bid put some lipstick on the pig ahead of tomorrow’s retail sales data…

VIX was clubbed like a baby seal back to a 16 handle…

Treasuries were mixed with the short-end lagging (2Y +3bps, 30Y -4bps), but all yields are down on the week…

Source: Bloomberg

Today’s price action was a little wild in bond land with the CPI print sending 2Y up to 4.00% where it was firmly rejected…

Source: Bloomberg

The dollar was dumped overnight and through CPI, only to retrace those losses to end unchanged on the day…

Source: Bloomberg

While the dollar was unchanged, gold prices tumbled, erasing much of Monday’s gains…

Source: Bloomberg

Oil prices followed a similar trajectory, with WTI dropping to a $76 handle intrday (after an unexpected crude build)…

Source: Bloomberg

Bitcoin was battered back down to $59k after CPI and reports that Kamala’s administration is dumping more Silk Road seizures…

Source: Bloomberg

Finally, market-driven financial conditions have eased dramatically in the last few months…

Source: Goldman Sachs

…clearly the market is demanding 200bps of cuts this year…or else, Kamala loses!.