Market Journal: Today is a Day
Market Journal: Today is a Day
No signs (yet) of even a temporary bottom in SPX.
Discussion
Obviously anything can change at any time, but right here and now at 11:08am there are NO signs that SPX is at even a temporary bottom.
NYSE breadth is greater than 10:1 to the downside
HY CDX is moving aggressively higher, up almost 18 bps on the day
VIX and VVIX are up 19% and 18.6% as I type
And TIPS 10s are holding their break out above prior key levels that precipitated Financial Crises 1.0 and 2.0
“Data dog” Goolsbee speaks on CNBC at 11:30, so there is some mid-day risk that the risk-off tone takes a breather. But make no mistake, today is a day.
The package of economic data that the bond market has been foreshadowing points decisively to the fact the Fed is still behind the curve of slowing the economy to the point of bringing inflation structurally back to 2-3%:
ADP blew away expectations, up well over 400k
ISM Services employment came in at 53.1 versus 49.2 last month
And the JOLTS quit rate ticked up on the month
With the Fed determined to bring inflation back to 2-3% on a structural basis, macro bulls simply cannot have their cake (strong growth) and eat it (easy FED), too.
Exhibits
