* The notable fall finally came, Dow fell -396pts, S&P500 down -0.72% to 5205, Nasdaq -0.35%
* Tesla plunged as much as close to -7% before close off the lows down -4.9% on news that its quarterly delivery for Q1 24 fell (by -8.5%) for the first time since 2020
* NVIDIA -1.01%, AMD -2.53%, Apple -0.7%, MSFT -0.74%
* Health stocks got beaten overnight led by Humana -13.41%, United Health's -6.44%; XLV -1.56%, Vertex -2.63%, VEEV -6.12%, Novo Nordisk -0.86%
* Gold the exception, rising $29 or +1.3% to $2,280 (AUD Gold now just under $3500), GDX and GDXJ rose by +1.25% and +1.61% respectively
* DXY dropped to 104.75 although US 10yr continued rising to 4.35pc
* BTC now down to $65,670 and needs to stay above $60k
* GSIT, touted by some as the next rising star to NVIDIA with a mcap of just US$86m, soared 35.88% on the day
* WTI Crude +1.68% to $84.85 (how will this help inflation?), oil stocks broadly higher, XLE +1.41%, Exxon +1.96%, Occidental +1.33%, ConocoPhillips +1.55%
* Lithium stocks lower in tandem with Tesla - LIT -0.39%, ALB -2.09%, SQM -1.78%, but LAC (featured stock) +0.36% (+23.94% over the past month)
* Intel down almost -4% in after hours on revelation of $7B operating loss in foundry business
Mixed (well good) data this morning - in-line JOLTS (labor market shows no signs of cracking), stronger than expected Factory orders, but weaker than expected durable goods (final) and shipments data actually shrank in Feb (bad for GDP) - had no major impact on rate-cut expectations (which remain low - 67bps total cuts in 2024, 50% odds of June cut). US macro surprise data is picking up (and overnight saw European PMIs better than expected)... Source: Bloomberg
But Fed's Mester sung from the same hymn-sheet as Waller and Bostic, saying that The Fed needs more time to make the 'cut' call: “But I need to see more data to raise my confidence,” Mester said Tuesday in prepared remarks for an event at the Cleveland Fed.
“Some further monthly readings will give us a better sense of whether the disinflation process is stalling out or whether the start-of-the-year readings reflect a temporary detour on the downward path back to price stability.”
And then she explained her view of Fed asymmetry: “At this point, I think the bigger risk would be to begin reducing the funds rate too early,” Mester said.
“And with labor markets and economic growth both being very solid, we do not need to take that risk.”
And while Mester's comments did not seem to be an immediate catalyst, yields kept rising overnight (on stronger EU PMIs?), especially at the long-end (2Y unch, 30Y +6bps) extending yesterday's bloodbathery... Source: Bloomberg
The 10Y broke above its YTD highs to its highest since Nov 2023 (2nd biggest 2-day jump in yields since October) Source: Bloomberg
...and steepening the yield curve (2s30s) significantly... Source: Bloomberg
And stocks appeared to run out of momentum again overnight as yields rose during the European session with Small Caps extending losses in the US session. The last hour saw a mini buying spree which put a little lipstick on the day's pig. Small Caps were the biggest losers...
'Most Shorted' stocks were clubbed like a baby seal for the second day in a row... the biggest 2-day drop in the shortest stocks since November... Source: Bloomberg
The dollar tumbled, erasing most of yesterday's gains... Source: Bloomberg
Bitcoin took a big tumble today, with reports that the alleged 'Silk Road' wallet moved 30,175 bitcoins to a Coinbase wallet (perhaps priming for a sale). Source: Bloomberg We note that the last time this wallet - in March 2023 - was a serious BTFD opportunity... Source: Bloomberg
Also of note, the players in the perp futs market have been very active the last couple of days (all but one of the heavy volume surges were sells)...
Ethereum was worse... taking the ETH/BTC ratio down to its lowest since April 2021... Source: Bloomberg
But while one 'alternative' currency is tumbling, another (older one) is rallying to new record highs... Spot Gold hit $2277 intraday - a new record high.... Source: Bloomberg
For a change, Silver outperformed gold today, with spot prices surging up to $26 for the first time since May 2023... Source: Bloomberg
And Black Gold also surged up above $85 (WTI) - the highest since Oct 2023... Source: Bloomberg
Finally, as growth expectations have stagnated somewhat over the past year (though the last week has seen some positive surprises), Citi's inflation-suprise index has resurged back to its highest since Dec 2022... Source: Bloomberg
...we love the smell of stagflation in the morning... and gold is rising along with Fed policy-error-risk.
