Turbo-Taper Sends Stocks & Bond Yields Lower On The Week

The Fed’s hawkish statement and Powell’s modest ‘good cop’ effort left rate-hike odds all higher on the week with May 2022 now the most likely ‘liftoff’ for rates…

Source: Bloomberg

While stonks kneejerked higher on Wednesday, this hawkish shift ended up dragging markets lower on the week. Nasdaq was the week’s biggest loser; The Dow was the least ugly horse in the glue factory…

Defensive sectors dominated the week with Energy, Tech, and Discretionary the most hated…

Source: Bloomberg

AAPL was down 4.6% on the week – its biggest weekly loss since Feb…

But everything is fine, right?

Shorts were double-squeezed this week – on FOMC and into OpEx…

Source: Bloomberg

Bond yields were lower across the curve on the week with the short-end underpeforming and belly bid… (7Y -8bps, 2Y -1bp)…

Source: Bloomberg

The yield curve flattened on the week…

Source: Bloomberg

The Dollar rallied back from post-Powell pummelling to end higher on the week…

Source: Bloomberg

Cryptos were all lower on the week…

Source: Bloomberg

Commodities were mixed on the week with oil lower and PMs eking out very modest gains…

Source: Bloomberg

Finally, a Bloomberg study of past instances when the Nasdaq 100 index climbed 2.4% over one session before sliding 2.6% the next day — as happened Wednesday and Thursday — provides succor for short-term bears.

The pattern occurred seven times in the past decade, mostly in the pandemic crash last year. On average, the technology heavy-index fell by 3.7% over the next five days.