After three months of divergence, hard data started to lag this week, catching down to the more sentiment-driven 'soft' survey data, and dashing hopes of a soft landing happening in the US economy...

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Source: Bloomberg

The market has shifted hawkishly this week, with expectations for the terminal Fed rate rising and expectations of subsequent rate-cuts falling (both back up near pre-CPI levels)...

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Source: Bloomberg

And that reality check weighed on the equity market broadly with Nasdaq hammered hardest (Nasdaq down three weeks in a row). The Dow managed to make gains on the week (best week since Thanksgiving)...

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As they careen towards putting in the second worst December performance ever with Nasdaq -9% so far (Dow down 4.2%)...

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Energy stocks outperformed on the week while Tech and Consumer Discretionary lagged...

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Source: Bloomberg

TSLA is down 6 straight days (and 9 of the last 10 days) and 10 of the last 14 weeks.

Bonds (which closed early today) were also dumped this week, led by the long-end with the 10Y yield up 26bps - the biggest weekly yield surge since April...

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Source: Bloomberg

The 10Y Yield is back up at one-month highs (erasing all the price gains since Powell's dovish address in late November)...

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Source: Bloomberg

The dollar slipped lower on the week, back to post-CPI lows...

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Source: Bloomberg

Cryptos continued their low-vol range-bound trading with Bitcoin holding just below $17,000 for the week...

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Source: Bloomberg

Gold ended the week unchanged (basically the 3rd week in a row where - despite intra-week volatility - the precious metal has ended flat around $1800)

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Source: Bloomberg

Oil prices rallied for the 2nd straight week with WTI topping $80 on its best week since early October

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Finally, while December looks set to be the second worst month for stocks ever, The Dow is set for its best year since 1933 relative to the S&P 500...

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Source: Bloomberg

As Bloomberg notes, The Dow's reliance on blue-chip companies has made it a place of relative safety as rising interest rates pushed investors away from technology stocks. Some bears are betting the outperformance won’t last: short interest in the SPDR Dow Jones Industrial Average ETF Trust is hovering at 3% of shares outstanding, the highest level since August 2020, IHS Markit data show.

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