A surprise RBA rate-hike, hotter than expected headline EU inflation, weak JOLTS, poor US factory orders, a sudden realization of the urgency and seriousness of the debt ceiling debacle, Europe back from vacation, and/or just pre-FOMC jitters?
…or was it this?
As a reminder, the Fed NOW has next week’s dire SLOOS report in hand
— zerohedge (@zerohedge) May 2, 2023
US Macro data is serially disappointing…
Source: Bloomberg
US debt ceiling anxiety is serially increasing…
Source: Bloomberg
Bank stocks were a bloodbath as the world and his pet rabbit realized JPM hadn’t saved the universe. Regionals were smashed lower as whack-a-mole resumes…
Source: Bloomberg
And even the big boys suffered…
Source: Bloomberg
Overall, all the majors were lower today with Small Caps hardest hit…
‘Most Shorted’ Stocks puked hard…
Source: Bloomberg
0-DTE fought hard against the initial down-thrust in stocks from the cash-open. Stocks stalled around 4100 then rebounded and then around 1400ET, 0-DTE call-buyers took profits…
VIX1D soared today, breaking back above VIX for the first time since April 11th (ahead of CPI) and April 6th (ahead of payrolls)…
Source: Bloomberg
And as we noted earlier, equity markets remain somewhat more sanguine about the debt ceiling threat that other markets
Source: Bloomberg
And then there was Chegg, down 50%… AI’s first victim…
Source: Bloomberg
Treasuries were aggressively bid as Europe’s liquidity returned and the heavy corporate calendar eased up. The long-end underperformed but the entire curve plunged (30Y -10bps, 5Y -18bps, 2Y -16bps)…
Source: Bloomberg
2Y Yields fell back below 4.00%…
Source: Bloomberg
Rate-hike odds plunged today ahead of tomorrow’s FOMC statement. The market adjusted down to an 85% chance of a 25bps hike tomorrow…
Source: Bloomberg
…but most notably, June went from a 35% chance of 25bps hike to a 15% chance of a 25bps rate-cut today…
Source: Bloomberg
The dollar dipped lower on the day, erasing European session gains…
Source: Bloomberg
Bitcoin bounced off $28,000…
Source: Bloomberg
Gold surged back above $2000, with futs at 3-week highs…
Oil plunged with WTI back to a $71 handle – well below the pre-OPEC+ lows – suffering its biggest drop since Jan 4th…
Finally, circling back to the beginning, how do you think the global economy is going to cope with the massive tightening of lending standards…
Source: Bloomberg
Especially when inflation remains far stickier than anyone expected it would be by this time in the tightening cycle.
Tyler Durden
Tue, 05/02/2023 – 16:01
