Inside Markets — SPX Resistance
The SPX is testing near-term resistance at 5119. A sustained break above that level would shelve our tactically bearish outlook.
Inside Markets — Peak Inflation Fears
Yesterday’s note on the disinflationary implications from April flash PMI and record high real yields have started another branch for the decision tree.
Inside Markets — Historical High
Ten-year real yields (nominal yield – inflation expectations) are at an historical high of +225bp.
Inside Markets — Busy Week
Yesterday’s recovery in US equities was primarily driven by short covering into a busy week of earnings.
Inside Markets — Oversold Rebound
Last week’s ~3% decline in the SPX followed a ~12bp backup in 10-year yields amid an upside retail sales print and more hawkish Fed messaging.
Inside Markets — New Phase
We entered a new phase in markets when 2-year Treasury yields broke above 4.80%. This was the level we identified as significant in our March 14th edition of Inside Markets.
Inside Markets — Hawkish Pivot
Monday’s upside retail sales number (proxy for GDP growth) combined with three consecutive hot CPI prints are now driving increased concern that the Fed will have to make a hawkish pivot sometime in Q3 or Q4.
Inside Markets — Commodities
The relatively muted reaction in commodities means that geopolitical headlines had little to do with yesterday’s sell off in equity markets.
Inside Markets — Realized Equity Volatility
US equities begin the week lower as investors digest the weekend’s geopolitical developments in the Middle East.
Inside Markets — Hotter-than-expected
US equities are broadly lower after a hotter-than-expected CPI print.