Bonds, Bullion, & Black Gold Bid As Bad-flation Batters Bitcoin & Big-Tech

The question dominating price action across all asset classes remains: can the Fed achieve a soft landing for the economy or will it inadvertently plunge the economy into recession/stagflation?

Bonds appear convinced of the ‘recession’ narrative as the short-end saw yields rise (Fed tightens) as the long-end collapsed (… and creates a recession that prompts easing). 30Y Yields fell 9bps today while 2Y yields rose 2bps…

Source: Bloomberg

Prompting a significant curve flattening (policy error risk)…

Source: Bloomberg

10Y Yields briefly spiked back above 3.00% on the CPI print and then dived lower, closing at their lowest yield close since 4/28…

Source: Bloomberg

STIRs are betting on a more aggressive Fed fighting inflation…

Source: Bloomberg

Stocks know only one thing – The Fed will keep tightening aggressively after today’s CPI print and probably trigger a recession. The days of bad news being good news are well and truly over as growthy, long-duration stocks were hit hardest (Nasdaq down over 3% today)…

NOTE the dip-buyers desperately bid stocks back up after CPI across the cash-open then it all went to hell after Europe closed.

This is the biggest 5 day drop for stocks since 3/20/20…

S&P 4,000 appears to be lost for now…

BofA suggests next support at 3824-3815…

Nasdaq is now down over 29% from its highs, Dow down over 17%, and the S&P almost 14%…

FANG stocks are down over $2 trillion in market cap

Source: Bloomberg

Crypto appears stuck between liquidity withdrawals driven an inflation-fighting Fed and ongoing stagflation. Bitcoin chopped around aggressively today, ending on the downside, back below $30k…

Source: Bloomberg

TerraUSD was chaos today…

And Luna crashed even worse…

Commodities were mixed but appear to have found support on the inflation bandwagon with oil and gold rallying today…

WTI soared back above $106…

And gold jumped back above $1850…

And retail gasoline prices hit a new record price…

Humpday Humor…

And Diesel is exploding higher…

Finally, Global Stagflation is no longer in doubt…

Source: Bloomberg

We’re on the brink of global recession. Our 2022 growth numbers are far below consensus (BBG) and the IMF. We see recession in the Euro zone, with growth of only 1%. We’re below consensus on China with only 3.5% growth. The world is on the brink. With @econchart & @JonathanPingle pic.twitter.com/UVD4u3jYyv

— Robin Brooks (@RobinBrooksIIF) May 11, 2022

Brace!!!