China deflation, Italian authorities watering down bank-tax threats, and fears about the AI Boom’s reality (SMCI’s comments dragged down NVDA) were the headline narrative-shapers of the day… but all anyone cares about is the giant event risk mountain that tomorrow’s CPI print represents.
Futures drifted gently higher overnight but started to stall into the open and then a wave of selling hit until the European close. That BTFD bounce lasted until 1430ET (margin-call time?) when The Dow and S&P briefly got back to even, and then stocks faded aggressively into the close
The Nasdaq closed below its 50DMA…
…for the first time since early March…
Italian authorities appeared to chicken out and watered-down their bank windfall tax plans, which sent Italian bank stocks surging (but still down on the week)…
Source: Bloomberg
But US banks didn’t bounce, ending lower again (Regionals)…
VVIX remains stressed ahead of tomorrow’s CPI (although we saw a fade in VIX)…
Source: Bloomberg
Bonds were mixed on the day with 5Y and shorter higher in yields and anything beyond 5Y lower (30Y -4bps, 2Y +4bps)…
Source: Bloomberg
Strong 10Y auction dragged its yield back to 4.00%…
Source: Bloomberg
The dollar was flat on the day, holding around the pre-payrolls level…
Source: Bloomberg
The Ruble’s recent collapse accelerated today and prompted the Bank of Russia to halt FX purchases until the end of 2023 (to prop up the Ruble)…
Source: Bloomberg
Gold dropped to its lowest close since March, heading back towards $1900 and $1893 support…
Source: Bloomberg
Oil prices broke out to new 2023 highs today, with WTI back above $84.50…
Source: Bloomberg
Finally, this just made us laugh and we pre-emptively apologize to those whose feelings are hurt. Goldman Sachs unveiled their so-called Obesity Index to track a basket of companies that are benefiting from the recent rage of GLP-1 agonist weight-loss drugs.
Source: Bloomberg
The Index ticker is GSHLCBMI – which we assume stands for Huge-Lardass-Chubby Body Mass Index – and it is outperforming.
But, there is something a little more serious happening with the AI Boom…NVDA is back at one-month lows, down over 12% from the highs in mid-July…
Source: Bloomberg
It’s not really as easy as that is it?
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