Bonds, Bitcoin, Bullion, & Big-Tech Bid As ‘Powell Promises’ Purge PPI Panic

Hawkish fears from soaring PPI were almost instantly purged by promises of ‘no taper anytime soon’ from Powell but when details emerged about the Democrats’ massive tax-anything-that-moves (and is not black or poor) sparked a puke in stocks and bond yields. But stocks all rebounded as Powell began speaking again… this is so f**king sad!!! However, when Powell started to talk about inflation and housing data – tying himself in Gordian knots – stocks started to fade again…

Once he stopped talking, stocks rose…but Small Caps were monkeyhammered… again!

The ongoing collapse of Small Caps (value) relative to Nasdaq (growth) pushed the ratio to its lowest since the start of December…

Growth/Value found support again at a critical level (will it stall out here?)…

Source: Bloomberg

“Most Shorted” stocks slumped again today, now at their lowest since the start of June…

Source: Bloomberg

Bank stocks were a mixed bag again after BofA, Wells, and Citi earnings today…WFC big winner vs BofA…

Source: Bloomberg

Bond yields tumbled today, erasing yesterday’s post-CPI, post-auction spike…

Source: Bloomberg

And 10Y Yields are once again back below 1.40% (and 30Y back below 2.00%)…

Source: Bloomberg

The dollar dumped all of its post-CPI/Auction spike gains from yesterday…

Source: Bloomberg

Kiwi rallied on an unexpected early end to QE by RBNZ…

Source: Bloomberg

Bitcoin tested down below $32k overnight but rebounded…

Source: Bloomberg

Ethereum also rebounded but was unable to hold above $2,000…

Source: Bloomberg

Oil plunged on the tax headlines (after dropping on duelling OPEC+/UAE headlines) and a disappointing plunge in gasoline demand (which the algos appoear to have missed is completely seasonally normal post-July 4th)…

Source: Bloomberg

But nevertheless, oil puked hard and was hit late on as Iraq jumped on the bandwagon, demanding its baseline production level be increased too…

Gold on the other hand accelerated its gains after bouncing off $1800 yesterday…

Lumber was clubbed like a baby seal again today (6th straight drop) to its lowest since the start of the year…

Source: Bloomberg

It seems we have to believe that lumber is more important than crude to believe the transitory hype…

Source: Bloomberg

Finally, we note that Powell managed to knock the market’s expectations for Fed action down modestly today (just less than 1 rate hike priced in by end 2022)….

Source: Bloomberg