Banks & Big-Tech Burst Higher, Bonds & Bullion Bid As Macro Skids

An insanely schizophrenic day...

Weak retail sales (real retail sales down 4 of the last 5 months), and even weaker industrial production (negative YoY amid sizable downward revisions) set the scene early on with US macro surprise index dropping by the most since Feb...

Source: Bloomberg

But, after Value outperformed Growth early on, that was completely reversed after MSFT announced new pricing for its AI offerings...

Source: Bloomberg

That drove value back near its record lows relative to growth...

Source: Bloomberg

For context, MSFT and NVDA have added $175BN market cap today, more than the mkt cap of 462 S&P companies, and more than the value of Nike, Wells Fargo, Walt Disney, Morgan Stanley, Intel, etc

All of which meant that the early relative weakness of Nasdaq reversed hard (right after the European close) as MSFT took off, catching up to Small Caps and The Dow...

A total reverse in the Nasdaq/Russell pairs trade...

Somewhat notably, the 'most shorted' stocks reversed the early squeeze today...

Bear in mind that next Monday is the Nasdaq rebalance and the 'up-weights' are now barely outperforming the 'down-weights' (after initially outperforming by over 4 percent)...

Source: Bloomberg

And then there were the banks with MS initially selling off on its earnings, only to reverse massively, rallying 7% on the day...

Tech & Energy outperformed along with Financials while Utes were the laggard...

Source: Bloomberg

Treasuries were mixed today with the long-end outperforming (30Y -3bps, 2Y +2bps). Bonds were well bid overnight, but gave much of it back during the US day session...