An odd week of data that ‘surprised’ in its convenience: Housing data – awesome? Labor data – awesome? Personal/Household data – sucks balls!
Source: Bloomberg
Talking of convenient – after a mass media narrative focus that the banking crisis is not real but is all due to short-sellers, today saw (guess what) a gigantic short-squeeze in several regional banks (PACW up almost 100% at one point)…
BUT… regional banks were still down hard on the week…
Source: Bloomberg
Oh, and who are you gonna blame for the collapse in bonds (and feel free to argue with the biggest flow desk on the street which saw longs liquidating… not shorts piling on)…
Someone tell those evil stock shorts to stop shorting PACW bonds. That’s ok, the short selling ban will fix this. https://t.co/SiSR7PepVw pic.twitter.com/6eBl33XToF
— zerohedge (@zerohedge) May 5, 2023
Oh, and don’t forget the debt ceiling is looming ever closer…
Source: Bloomberg
The market’s expectations for The Fed tumbled dovishly this week as Powell hinted it’s over…
Source: Bloomberg
Markets are now pricing in rates being 75bps lower than current levels by year-end…
Source: Bloomberg
But it was Friday so we squeezed hard today, totally ignoring Bullard’s comments late on…
Bullard’s message was clear – this is not a pivot!
“The aggressive policy we pursued in the last 15 months has stemmed the rise in inflation, but it is not so clear we are on” a path to 2%, Bullard told reporters following an event in Minneapolis Friday.
He said he is willing to assess the economic data as it comes in, but would need to see “meaningful declines in inflation” to be convinced higher rates aren’t necessary.
However, despite the bounce, only Nasdaq made it back into the green for the week (but the last few minutes saw selling push it back red) while The Dow was the ugliest horse in the glue factory…
Big short squeeze today took ‘most shorted’ stocks back to unchanged on the week…
Source: Bloomberg
But notably, 0DTE was aggressively fading the early gains in stocks before reversing…
Source: SpotGamma
Most notably, the early action was all put buying and the late surge was not covering but call-buying…
Source: SpotGamma
Despite a big tumble today, equity risk higher (VIX) on the week for the first time in two months
Source: Bloomberg
Credit risk was higher on the risk…
Source: Bloomberg
Bonds were mixed on the week with the short-end bid, long-end offered…
Source: Bloomberg
Yield curve steepened significantly on the week…
Source: Bloomberg
Dollar down notably again (7th of last 9 weeks)
Source: Bloomberg
Bitcoin was flat on the week while Ethereum notably outperformed (topping $1950)…
Source: Bloomberg
Gold & Silver were up on the week with the latter outperforming (amid a lot of chop)…
Oil & NatGas were down hard on the week, despite the bounce today.
Oil’s midweek flashcrash seemed to flush some hands out…
NatGas was just a sell every rip market all week…
Gold ended just shy of a record weekly closing record high…
Source: Bloomberg
Finally, bear in mind that the market is still massively more dovish than The Fed’s expectations… (market sees a 38% chance of a cut in July)
Source: Bloomberg
Chicken or egg – for The Fed to fold, the market will have to crash but the market won’t crash because everyone knows The Fed will fold and juice stocks back to un-reality… tick-tock!!
Tyler Durden
Fri, 05/05/2023 – 16:00
