Hotter than expected Services surveys - with a big jump in prices - was just the good news the market did not want to hear. Though no BULLETin reader should be surprised by this resurgence in economic 'animal spirits' - it is merely the lagged response of an economy that was fed a massive loosening of financial conditions late last year...
...As we saw a lot of last year: bad news is good and good news is bad, at least when it comes to trading a soft landing and the odds of rate-cuts in the short-term tumbled...
Unsurprisingly, this morning's data, Chair Powell's 60 Minutes comments, along with the strong payrolls report, generally strong macro data points, and largely constructive earnings reports we have seen recently, are all combining in a step higher in 10-year UST yield, breaking out decidedly above 4.00%...
And higher rates hammered stocks...until they didn't. Stocks initially puked, only to revert dramatically higher (with Nasdaq getting back into green). Small Caps were clubbed like a baby seal today, as was The Dow, while Nasdaq couldn't quite hold green into the close...
Source: MarketWatch
USD continues to power on making the Aussie Battler around USD$0.6478 while Gold and Oil while Bitcoin surged overnight, back above USD$43,500 before plunging back to earth after headlines about bankrupt crypto-lender Genesis Trading filed a motion to liquidate over $1.6 billion in crypto...
Finally, I found this chart to be simply...
Is the market pricing in a Trump victory?
Based on Goldman's Republican winners vs losers basket performance (yes there is a chart for that!), it appears US stocks are moving in sync with Trump's odds.
Happy Tuesday!
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Andy is the founder of ANDIKA Pty Ltd, a licensed securities & derivatives dealer. He's the author of fiction and non-fiction books and has been a University lecturer on risk and investment.
