Today seemed to defy gravity and logic. One example -– The SOXL. which was down -15.4% on the lows then procured a +20% intra-day rally to end the day +9%. But that wasn’t the only wild swing — the S&P swung over 5%, Bitcoin swung over 6% and JNK (HY Bond ETF) almost 2%. Not to mention, the Yen tested its former 1998 high at 147.66…and the 30yr fixed mortgage rate bumped up against 7%— nothing like the 80’s of course, but still 20y highs. That said, looks can be deceiving and some of the moves didn’t paint as clear a picture of a shift out of bonds and into equities as one might have expected.

It was certainly not a quiet start to the day, with confusion and murkiness around what the next steps from the BoE would be. US futures managed to shrug this off leading into the PPI data release albeit with slightly less follow through after a relative miss on the print. With the market so intently focused on these datapoints as an indication that the FED *might* budge- this did not do the trick. Nor did the FOMC minutes release later in the session which brought more of the hawkish narrative we are quite used to seeing by now.

It’s complicated, but Turnaround Tuesday is still relevant..ISH… But in the end, it just wasn’t enough – we’ll call it a good ole’ roundtripper. In early trading, US markets were quick to test the lows– where we began discussing “last ditch” support levels at 3584 on the S&P with some help next at 3400 but more solidly not until 3200. After thoroughly testing this threshold mid-morning, we were able to bounce higher and drift along into positive territory for the majority of the afternoon.

Note to self – turn Bloomberg alerts off over the weekend. One minute you’re sitting there reveling in another improbable Cowboys victory while subconsciously trying to suppress the Sunday scaries. And the next an ‘alert’ drops into your phone warning you of the potentially pending doom known as Q3 earnings. Not exactly breaking news there BBG, no need to interrupt the last vestiges of my weekend. But interrupted it was although I’d be far less upset were I a fixed income trader, that lot enjoying a long weekend as bond markets stayed closed today.

There was no doubt that today was always going to be about NFPs. With inflation metrics not improving at the rate people want, this critical gauge of the economy has become heavily watched once again. The number came in higher than expected, and with the unemployment rate dropping to 3.5%, the Fed will need to stay the course. These implications sent futures sharply lower, and the markets reacted even more negatively when the implications became flat out statements – Kashkari & Williams both reiterated the hawkish narrative.