Soft Landing, Really?

S&P 500 started a brief correction on NFP's outdoing expectations, with other data confirming job market tightness as much as Dec NFP's upward revision to 260K. The resulting shift in expectations for three Fed rate hikes this year (and of course dialing back bets on those coveted cuts) sent the dollar sharply higher, and real assets down while stocks held up relatively well. Even the „broken“ VIX couldn‘t rise Friday – there is a good enough reason I haven‘t been bringing you volatility and put-to-call ratio metrics lately.

So, stocks are correcting, but the short-term picture is far from clear – while the defensives are refusing to decline, financials haven‘t rolled over yet (and regional banking acts are still OK). Neither value nor tech reversed on rising volume, indicating that this storm could be over in a couple of days, no matter the disastrous earnings thus far (yes, AAPL and beyond the tech layoffs) bringing negative surprises too -5.3% so far.

Markets aren‘t fearing a hard recession, but stocks are uneasy – in the very short term. The stunner creeping in is that the Fed somehow pulled it off, that soft landing – and job market data were taken as proof, which however has consequences for services inflation even commodities, and precious metals are nicely consolidating. Had been, till Friday – but that appears as a buying opportunity when deterioration in economic data sends yields and the dollar down. Summing up, I continue to think the soft landing thesis would be disproved by end of Q2 2023, and that a mild recession is ahead.

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Let‘s move right into the charts (all courtesy of

S&P 500 and Nasdaq Outlook

S&P 500 and Nasdaq

Higher rather than lower 4,140s held, but the dust hasn‘t yet settled. 4,105 – 4,095 is the next good support area as I think breaking back above 4,165 would take a while.

Credit Markets


Bonds will likely take a while to calm down, but junk corporate ones aren‘t yet leading to the downside. The risk appetite won‘t though return too soon – basing around current levels for today, would be a success.

Bitcoin and Ethereum

Bitcoin and Ethereum

Ever since I published this weekend crypto chart, prices declined, and are trying to keep the daily bottom in – that would be consistent with stopping Friday‘s risk-on bleeding.

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