S&P 500 celebrated inflation data coming in line with expectations yesterday, but the joy proved predictably short-lived as the realization that Fed would still not declare victory over inflation prevailed, and bond markets confirmed it. Junk corporate bonds remain dangerously overstretched here, and a similar fate to EEM or IWM awaits. Note also the disconnect between KRE and XLF, pointing to increasing concentration in banking ahead still.

Whenever Treasuries rise, the appeal of the risk-free rate of return decreases, and deposit outflows take it on the chin – conversely as we see today Credit Suisse in the spotlight again, that‘s risk-off as much as the upcoming data release with my projections thereof. The fact that USD is waking up – and increasingly more, doesn‘t bode well for stock buyers today.

Seems though that the focus now is on banking facilitated rush into dollars – ignoring PPI coming in better than expected as that together with manufacturing and retail sales down shows bad data (pointing to the inevitability of recession, disproving the no-landing thesis as a minimum) being correctly assessed as more important that misguided bets on the Fed not tightening even 25bp next.

Keep enjoying the lively Twitter feed serving you all already in, which comes on top of getting the key daily analytics right into your mailbox. Plenty gets addressed there (or on Telegram if you prefer), but the analyses (whether short or long format, depending on market action) over email are the bedrock.
So, make sure you‘re signed up for the free newsletter and that you have my Twitter profile open with notifications on so as not to miss a thing, and to benefit from extra intraday calls.

Let‘s move right into the charts (all courtesy of www.stockcharts.com).
 

Gold, Silver, and Miners

Precious metals are to keep increasingly turning, and would recover from any hits due to liquidity / solvency doubts washing across the US shores.
 

Crude Oil

Crude oil hasn‘t found a bottom yet, and after a $71 break, the next strong support would be $66 – black gold is reacting to unexpected deterioration in economic prospects, to signs of an upcoming recession.

More By This Author: