Raging Inflation Sparks Bond Bloodbath, Slams Stocks As Dollar Spikes

The highest Core CPI in 30 years stole all the headlines today, prompting a significantly hawkish shift in Fed rate-change expectations…

Source: Bloomberg

While most will reflect on the soaring inflation print as driving bonds bloodbathery today, it was actually a shitty 30Y auction that really triggered the selling…

Source: Bloomberg

30Y pushed above 2.00%, stalling at the short-squeeze ledge from last Tuesday…

Source: Bloomberg

Breakevens surged…

Source: Bloomberg

Stocks were all hit on the surprise CPI print but all bounced back with Nasdaq soaring back into the green. But the weak-auction-driven spike in yields spooked stocks again and this time there was no bounce. Small Caps were the hardest hit as the algos tried their hardest to keep Nasdaq green…

Or put another way…

The massive divergence between Nasdaq and Russell 2000 sent the ratio to fresh cycle lows (its lowest since December 9th)…

JPM and Goldman released earnings and both were down on the day…

Source: Bloomberg

VIX spiked above 17 twice today…

The dollar double-spiked today on the CPI and auction…

Source: Bloomberg

…and is at a critical resistance level…

Source: Bloomberg

Cryptos were hit also with Bitcoin sliding back below $33k, but remaining on its recent range…

Source: Bloomberg

As Ethereum tumbled below $2,000 to its lowest since June 28th…

Source: Bloomberg

Gold had a whipsaw-y day with CPI sparking some swings that found support at $1800 and rebounded…

Oil managed gains after recent losses with WTI pushing back above $75 ahead of tonight’s API inventory data…

Finally,  according to data compiled by Bloomberg, U.S. technology stocks may soon be more costly than they ever were in the dot-com era.

Source: Bloomberg

The S&P 500 Information Technology Index closed Monday at 7.43 times sales; that’s less than 0.3% from a record in March 2000.

The industry is challenging the high 3 1/2 years after the S&P 500’s price-sales ratio first topped its own March 2000 peak. Technology-stock valuations are at odds with “unprecedented headwinds” such as fiercer competition, higher taxes and stricter regulations, Morgan Stanley Wealth Management wrote in a report Monday.

Will this surge in stocks prove as transitory as The Fed hopes inflation is?