Ugly Canadian CPI, surging crude prices (early – on Azerbaijan angst)), mixed housing data, and a trigger happy group of traders anxiously awaiting tomorrow’s Fed-sponsored narrative all sparked some chaotic moves in markets today.
The headline-making market of the day is USTs today with a double-barf sending yields 5-7bps higher on the day…
Source: Bloomberg
Which pushed yields to their highest since 2007…
Source: Bloomberg
With bonds at their cheapest to stocks since Oct 2007…
Source: Bloomberg
At the very short-end of the curve, the market has really started to embrace the ‘higher for longer’ narrative as this year’s rate-change expectations have drifted (dovishly) lower (less expectations of more rate-hikes) while next year’s rate-change expectations have surged (hawkishly) higher, pricing out expectations of rate-cuts…
Source: Bloomberg
All of which pressured stocks lower – especially longer-duration assets. After Europe closed, the algos tried to lift the major indices back to unch but failed…
CART IPO’d at $30, opened at $42, rallied up to $42.95 before fading the rest of the day…
ARM fell back below its post-IPO opening price…
Regional banks keep falling – now back at SVB tumble lows…
The dollar chopped around but ended back in the very tight range of the last couple of days…
Source: Bloomberg
Bitcoin bounced back above $27,000…
Source: Bloomberg
Gold (spot) neared $1940 intraday, but ended unchanged…
Source: Bloomberg
Oil prices pumped (to new cycle highs) and dumped (WTI finding support at $90) to end practically unchanged…
Finally, with real yields hitting fresh highs, one wonders when reality hits for equity valuations?
Source: Bloomberg
Consider what kind of shift (down) in real yields it would take to rationalize this valuation (economic depression?)
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https://www.zerohedge.com/markets/bond-yields-blasted-16-year-highs-stocks-sink-ahead-fed
