Big Tech, Bitcoin, & The Buck Battered As Commodities Crash-Up

Inflationary impulses are showing up everywhere.

Real yields are rising rapidly (with 30Y no longer negative)…

Source: Bloomberg

Breakevens have soared, but we do note that the BE curve implies beyond 5Y will see a disinflationary process…

Source: Bloomberg

Commodities are soaring to the highest since 2013…

Source: Bloomberg

And even gold was on the rise today, back above $1800…

Source: Bloomberg

But, that reflationary rise (the good growthy reflation, not the bad hyperinflationary dollar collapse one, oh no) is having some unintended consequences that Jay Powell and his pals are going to have to deal with soon.

Money markets are hawkishly tightening with expectations for rate-hikes being brought forward…

Source: Bloomberg

… and the rate-hike-trajectory steepening (100bps of tightening from Dec 2022 to Dec 2024 now priced in)…

Source: Bloomberg

The question is – Will Powell “cut the rope” tomorrow?

Spoiler Alert: No!

Boeing weighed on The Dow early amid the terrible events over Denver but that merely sparked a buying panic that sent the stock to new highs!?? WTF! But that stop-run did not last…

On the day however, The Dow managed to hold gains as Big Tech (Nasdaq) was clubbed by a baby seal – 2nd worst day since October (5th down day in a row) – and Small Caps puked along with Nasdaq late on, starting at 1430ET which smells a lot like margin calls…

The Dow massively outperformed the Nasdaq today, erasing all the YTD underperformance…

Source: Bloomberg

Small Caps have also erased all losses relative to big-tech since the March collapse…

Source: Bloomberg

The S&P 500 fell for a fifth straight trading session, its longest losing streak since February of last year, as investors continued to price in stronger growth and faster inflation as the economy recovers (and potentially tighter monetary policy).

Did Gartman do it again?

The Gartman top is in!!! pic.twitter.com/9e34MuDHTL

— ZeroHedge⚙️ (@govttrader) February 19, 2021

Energy stocks exploded higher today (upgrades from GS & MS) as tech and utes lagged…

Source: Bloomberg

Tesla was trounced today, thoroughly breaking below the $800 level…

Bonds chopped around like WSB obsession today, but ended higher (and the curve steeper) on the day…

Source: Bloomberg

Analysts at BofA noted 30-year bonds had returned -9.4% in the year to date, the worst start since 2013.

Treasuries are the most attractive to hedged EU and JP traders since 2015…

Source: Bloomberg

The dollar roundtripped on the day and ended lower…

Source: Bloomberg

Thanks to The Fed’s jawboning:

• *Kaplan: Loss of Dollar Reserve Status Would Complicate Govt Borrowing

• *Kaplan: Dollar Reserve Status Means US Can Finance Large Borrowing

Translation: we will continue doing idiotic things until we lose reserve status

The DXY tested the key 90.0 level today…

Source: Bloomberg

Cryptos were clobbered twice since Friday with this morning’s puke more notable… but the buy-the-dip power was strong…

Source: Bloomberg

Bitcoin puked over $10,000 from its highs to its lows before ripping back over $6,000 to $54,000…

Source: Bloomberg

Ethereum also collapsed intraday and bounce back, erasing around half the drop…

Source: Bloomberg

Some highlights from commodity-land.

Copper careened to its highest since 2011…

Source: Bloomberg

Lumber pushed to a new record high…

Source: Bloomberg

Crude bounced back above $60 (WTI) helped by a double upgrade from MS and GS…

First Goldman, now MS pic.twitter.com/XlnbuW3vMR

— zerohedge (@zerohedge) February 22, 2021

Silver surged back above $28…

Gold rallied today, even in the face of rising real yields…

Source: Bloomberg

Silver is at its highest relative to Gold since 2014…

Source: Bloomberg

And finally, if the signals from commodity-land are correctly signaling the growth/reflationary outcome ahead, then 10Y Yields are set to reach 3.00%…

Source: Bloomberg

Which raises dramatic questions about whether The Fed would even allow such a thing? Because Yellen today made it clear, she wouldn’t!