Hotflation Sparks Gold Surge, Dollar Purge, Stock Splurge

Before we start, let’s summarize what we learned today (courtesy of @Lee_Saks)

• Yields: many many rate hikes

• Dollar: no rate hikes

• Stocks: mmm maybe some rate hikes

• Gold: we blew up the fed. no rate hikes.

Anyone else feel like the financial system is doing this again…

Futures show today’s fun-and-games best…

Nasdaq futures were up 3% off the CPI-crash lows…

Nasdaq and Small Caps were up almost 2% today!!

S&P retook the 2700 level…

And The Dow closed above its 50% retracement of the losses… That is a 600-point swing from the lows to the highs today!

This is the 4th short-squeeze day in a row – and today’s squeeze was the biggest since Feb 2017…

Risk-Parity funds are not exactly rebounding from their losses…

VIX closed below 20 again (after topping 25 intraday)… yay!!!

The belly of the curve was hardest hit today with 5Y up 9bps and the short-and and long-end up around 6bps…

10Y broke out to its highest since Jan 2014…almost reaching 2.92% today…stocks now love higher rates?

Expectations for more rate-hikes in 2018 picked up notably…

The Dollar Index spiked on CPI but then collapsed…BBDXY is down 4 days in a row, today was worst day for USD since The Mnuchin Massacre

As USDJPY tumbled today, so Gold spiked…

Reverting back to its more normal highly negative correlation regime (after briefly going positive in the last two weeks)…

For a little context, since The Fed hiked rates in December, The Dow managed to get green again today, the long-bond is a bloodbath (down 6%) and gold has soared 9%…

Thanks to a weak dollar, commodities surged with crude spiking after inventory data (ignoring production data)…

Big day for Cryptos today, as South Korean backpedalling on bans sent most of the major surging…

Notably, as the dollar tumbled both gold and bitcoin were bid…

Finally, we noted that Atlanta Fed’s GDPNOW model has already plunged from a 5.4% estimate to 3.25% today… just as it always does…