evening wrap

market vibes

February 13…)

I’m late for dinner and I had to rush this. Please forge typos and haste!

The bond market actually rallied on PPI which may have been equally as hot as CPI if not a little hotter for ex-food and energy YOY.

Overall behavior on March bonds is not wildy bullish or bearish. OI dipped a few lots yesterday. The 45 day slo stoch is not overbpught ot oversold. The down range yesterday, up range today and volume on both days are matched. What is notable is two consecutive days of outlier BLS inflation data produced precisely the same yields at before the data on Wednesday morning.

TLT had a very strong rally

In keeping with the “bad news good action” response to inflationary BLS data in bonds this morning, the dollar fell hard on what would ordinarily been reason to rally hard. In a nutshell Powell’s testimony was incomplete. He did say we are running hot. What did not say was, “Let the policy work.” Otherwise said…“I’m not going to do anything about it.”

The S&P managed an up day on very light volume and flat OI from yesterday’s session. Spicy numbers and the FOMC is mute…

Big names were mixed with NFLX in the lead which is a little weird since it is the major source of insidious WOKE & LGBTQ etc. messaging. COSTCO made a new ATH, also counter-intuitive since COSTCO is losing millions of its most loyal cash card customers to deportation. I don’t think things like that matter in this market. Algos are paid to do what they are told. Food for thought if you think AI will be really be all that.

Bitcoin did not rally with S&Ps indicating the flows to day were . Maybe tomorrow.

In energies NYMEX June Gasoline rallied lifting WTI from a dollar lower on the opening to unchanged by mid session.

May June gasoline spreads snapped back from a weak day yesterday, recovering all their losses and closing on the highs.

3/2/1 refining margins stayed very stong. The front of the WTI curve reamined weak. Longer dated spreasds like Dec-Red-Dec rallied a nickel.

Although gold did not make a new all-time high, Comex April did settle at a new all-time high close. The importance of the settlement is that every short in aggregate open interest is meeting a margin call tonight, and every long is collecting variation credit.

my vibe

Why are stocks and bonds flaunting a rally in the face of the FOMC and BLS data? They know Powell won’t hike with Trump pounding the table for lower rates. With DOGE auditing everything in DC, the Fed will come under scrutiny, and the Fed is not your ordinary grifting bureaucracy. It will happen in time, but a rate hike now would definitely hasten a call to the Eccles building by big balls and co. This has direct implications for gold and other risky assets.

If stocks and bonds can rally on this data… the dollar can have a pretty bad day… and gold can settle at an all-time high, there’s no one guarding the gate. Watch silver on Friday…

Good luck in Asia!

JJ

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