Hotter than expected CPI (as food costs reignite) and ugly jobless claims data (somewhat affected by Hurricane Helene) signal stagflationary pressures may be returning…

Source: Bloomberg

…sparked some initial chaos across asset classes, pushing rate-cut expectations lower (hawkish) for 2024 but higher (dovish) for 2025…

Source: Bloomberg

Stocks ended lower (with Small Caps the biggest loser) despite a late-day panic-bid into the close…

NVDA is holding it all together…

As VIX increased (now dramatically decoupled from stocks) ahead of tonight’s TSLA robotaxi event, and tomorrow’s PPI and the beginning of earnings season…

Source: Bloomberg

Treasuries were very mixed today with the short-end outperforming (2Y -3.5bps, 30Y +4bps)…

Source: Bloomberg

…which steepened the yield curve significantly, erasing all the post-payrolls flattening…

Source: Bloomberg

The dollar rallied for the 8th day in a row – the last time this happened, The Fed had just started hiking rates in April 2022…

Source: Bloomberg

Despite the dollar’s gains, gold also rallied today…

Source: Bloomberg

Bitcoin barfed late on today, back below the $60,000 Maginot Line once again (after an SEC lawsuit against digital asset market maker Cumberland DRW sparked more regulatory FUD)…

Source: Bloomberg

Oil prices also managed solid gains today after two ugly days with WTI back above $76…

Source: Bloomberg

Finally, the fundamental contradiction at the heart of today’s price moves is most easily seen in market measures of longer inflation expectations, which are rising even as two-year yields plumb session lows.

Source: Bloomberg

As Bloomberg’s Sebastian Boyd noted, the mixed nature of today’s data means that traders are trying to express the view that inflation is still a problem, but that the labor market is maybe weakening too, which will mean The Fed goes ahead with rate cuts anyway.