Stocks, Crude, & Bond Yields Plunge As 'Growth Scare' Sparks Surge In Rate-Cut Hopes

Just as we warned earlier in the week, the macro playbook has shifted to "bad is bad and good is good" as 'growth scare' narratives now dominate the set-in-stone rate-cut scenarios.

This morning's payrolls data was 'bad news' and so we see rate-cut expectations explode higher with over four full cuts now priced in for 2024...

stocks crude bond yields plunge as growth scare sparks surge in rate cut hopes

Source: Bloomberg

This prompted a massive plunge in Treasury bond yields...

stocks crude bond yields plunge as growth scare sparks surge in rate cut hopes

...especially at the short-end with 2Y yields dropping a stunning 29bps, back below 4.00%)...

stocks crude bond yields plunge as growth scare sparks surge in rate cut hopes

...but stocks don't like the 'not-soft-landing' narrative...

stocks crude bond yields plunge as growth scare sparks surge in rate cut hopes

Crude oil prices also plunged...

stocks crude bond yields plunge as growth scare sparks surge in rate cut hopes

But gold extended the week's gains (as the dollar dovishly limped lower)...

stocks crude bond yields plunge as growth scare sparks surge in rate cut hopes

USDJPY extended its decline (yen strengthening versus the dollar)...

stocks crude bond yields plunge as growth scare sparks surge in rate cut hopes

...now at its most oversold since 1997...

stocks crude bond yields plunge as growth scare sparks surge in rate cut hopes

How long before FedSpeak will drift dovish and adjust to the market's new narrative (remember The Fed 'DOTS' are still at 2 cuts in 2024).

Authored by Tyler Durden via ZeroHedge August 2nd 2024