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Daily Close

The publication of a surprisingly strong US CPI (+0.5% in January (from +0.2% in December), “beating” all expectations) coupled to a much weaker than expected US retail sales report proved a toxic blend worth a 50 (!) points gap down ahead of the s&p500 opening. This dip was somehow immediately bought and in absence of a reversal and follow through selling, the only possible path was to further recover and grind higher from there, a pattern which lasted throughout the entire session, allowing major indices to close 1.2% higher and at the highs of the day. Bonds also sold off 11bps on us 10 y treasuries on the ‘staglationary’ news cocktail of the day... but, as opposed to stocks, bonds stayed lower. As we suspected in our lines yesterday, short of a relapse in stocks, the path of least resistance for the dollar was also down (it fell across the board today ie vs. both DM and EM currencies) and the winners of the day were, in all logic, precious metals with gold and silver gaining respectively +1.2% and 1.4%, outperforming stocks slightly and responding to dollar weakness this time. This is how 1987 looked like apparently with the dollar and bonds down and stocks rallying in the first half. Commodities stormed back higher as well as the inflationary news struck. Cryptos rallied with bitcoins up 8.5% yesterday alone. Cryptos outperformed in the crash last week and in the recovery this week, a clear demonstration that animal spirits are back in the space. We still believe that before year end, reality will have struck there again, indlicting more pain to the thousands of newcomers and freshly converted who will have seen the dip of January as a buying opportunity, sending the space much lower than the lows of January. Our impression from Yesterday’s “general” price action is also one of still disorderly gyrations and troubles lying ahead, despite the appearance of further healing in stocks. It is increasingly clear to us (and we are not taking our cues from today’s cpi which is highly distorted and subject to revisions), as it has been for a while, that inflation is going to surprise on the upside and that the policy response will stop short of current expectations of tightening. We see two distinct risks looming on the horizon; a bond and a dollar crisis with the stock market caught in between and gold standing as the big winner and ultimate safe haven. 

BentinPartner Advisers, Basel There is more to our research than the Daily Close, the Confidometer and our blog posts. To receive actionable content, a comprehensive wrap up every day and our tactical FX and global models positioning or if you wish to be notified 24/7 with updates on key macro economic releases and/or technical breaches on our comprehensive investment universe covering international equities, bonds, FX, precious metals and commodities, take a free trial to the Bentin Daily, our premium research service. We help you know when to run and when to sit by tracking all developing (or well established) trends and equally importantly by flagging market breakouts. You may join our free trial by clicking here. https://www.bentinpartners.ch/subscribe We are leaving no stone unturned. Important Disclaimer © Copyright by BentinPartner llc. This blog is not intended as a recommendation, an offer or solicitation for the purchase or sale of any security or underlying asset referenced herein or investment advice. Investors should seek financial advice regarding the suitability of any investment strategy based on their objectives, financial situation, investment horizon and particular needs. This blog does not include information tailored to any particular investor. It has been prepared without any regard to the specific investment objectives, financial situation or particular needs of any person who receives this report. Accordingly, the opinions discussed in this blog may not be suitable for all investors. You should not consider any of the content in this report as legal, tax or financial advice. The data and analysis contained herein are provided "as is" and without warranty of any kind. BentinPartner llc, its employees, or any third party shall not have any liability for any loss sustained by anyone who has relied on the information contained in any publication published by BentinPartner llc. The content and views expressed in this report represents the opinions of Marc Bentin and should not be construed as guarantee of performance with respect to any referenced sector. We remind you that past performance is not necessarily indicative of future results. Although BentinPartner llc believes the information and content included in this report have been obtained from sources considered reliable, no representation or warranty, express or implied, is provided in relation to the accuracy, completeness or reliability of such information. This blog is also not intended to be a complete statement or summary of the industries, markets or developments referred to in the blog.  


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