US equities were little changed Wednesday, with S&P down 0.3% heading into the close. But there was a more significant move in rates: with US10yr yields down 12bps to 3.41%..Andย Oil is down another 2.3%.
Last week’s firm Payrolls number plus this week’s surprisingly robust ISM Services survey have continued raising doubts about the path forward for inflation, rates, and the Fed. And with a relative dearth of new macroeconomic information and sentiment still drenched in recession angst, investors continue orienting out of stocks and into bonds and gold as they contemplate the prospect of a still too-strong US economy and if a soft landing is anywhere near achievable.
And looking under the hood at critical market recession gauges, be it the yield curve inversion or closely watched ย Oil benchmarks, investors are reactively more concerned about the potential of a more severe recession than previously anticipated.
Oil bulls are feeling the discomfort of a macro-led environment where the prospects of a ย 2023 global recession are front and centre.
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And as China heads for the zero-Covid off-ramp, ย darker days loom as Covid cases are bound to surge.