Debt Ceiling Fears, Fugly Data, & FedSpeak Slam Stocks & Crypto; Gold & Bonds Bid

Some more ugly data today (Philly Fed slumped, claims jumped, home sales weak, leading indicators tumbled) sent the US Macro Surprise Index down to its lowest in over two months…

Source: Bloomberg

Debt ceiling anxieties are building (US Sovereign risk hits record high)…

Source: Bloomberg

And a scold of FedSpeakers today ahead of the blackout window did not help (most notably Mester):

• DOVISH-ISH – *FED’S GOOLSBEE: STILL FIGURING OUT CREDIT IMPACT OF BANK STRAIN

• NOTHINGBURGER – *FED’S WALLER SEES “CONSIDERABLE PROMISE” IN POTENTIAL USE OF BLOCKCHAIN TECH (no policy comments)

• HAWKISH – *FED’S MESTER: INFLATION STILL TOO HIGH, PROVING TO BE STUBBORN, NEED REAL RATES IN POSITIVE TERRITORY FOR SOME TIME

• HAWKISH – *FED’S MICHELLE BOWMAN: LOWERING INFLATION ESSENTIAL FOR ECONOMY

• HAWKISH – *DALLAS FED’S LORIE LOGAN SAYS INFLATION HAS BEEN MUCH TOO HIGH

And it was Mester that turned markets after Nasdaq had managed to get back into the green. The European open saw stocks get slammed lower only for the US open to get a boost from 0DTE traders lifting everything. But once Nasdaq had inched into the green, the buying ended and stocks plunged to fresh lows after Mester’s hawkish call…

Worst day in almost a month for US Stocks.

TSLA suffered its worst day since Jan after margins compressed more than expected…

AT&T also painted an ugly picture of the consumer…

Regional Banks gave back some of yesterday’s losses, but really its just floundering along at the post-SVB lows…

VIX hovered near 16 month lows, but VVIX has decoupled ahead of tomorrow’s OpEx…

Treasury yields were lower across the whole curve (with the 2Y outperforming on the day) with 30Y Yields actually dipping lower on the week briefly (and 2Y yields underperforming on the week)

Source: Bloomberg

The evolution of the shortest end of the curve over the past few weeks shows the rapid increase in anxiety over an earlier-than-expected X-Date for the debt ceiling as tax receipts dry up…

The dollar inched lower today – stuck in its narrow range this week…

Source: Bloomberg

Bitcoin extended losses, tumbling back to $28,000…

Source: Bloomberg

Gold rallied on the day with Spot prices back above $2,000…

Oil prices dropped notably with WTI briefly touching a $76 handle intraday, quickly erasing all the post-OPEC gains as recession fears weigh on demand growth outlooks…

Finally, amid all the chaos surrounding the debt ceiling debacle, USA is now ‘riskier’ than AAPL…

Source: Bloomberg

Some currency translation muddies the verdict, but the trend is clear.