Image Source: UnsplashStocks are at record highs (no landing at all); home prices are at record highs (and rising fast); and US macro data has dramatically surprised to the upside since the last FOMC meeting…Source: Bloomberg…but bonds are 35bps lower in yield (recession)…Source: Bloomberg…so it makes perfect sense that The Fed would slash rates by a crisis-like 50bps.All the majors were higher on the week, but faded gains today amid the biggest September OpEx ever. Small Caps outperformed its index peers on the week. Everything felt very technical this week as today’s Quad Witch (biggest September OpEx ever) seemed to drag everything in equity land higher yesterday with selling pressure erupting today as the opening options expired and continuing to the lows of the day…Goldman’s trading desk notes that overall activity levels are surging (+33% vs. the trailing 2 weeks with market volumes down -11% vs the 10dma) with their floor tilting -12% better for sale, this ranks in the 97th %-ile over the last 1yr.

Most Shorted stocks were squeezed hard on Wednesday but since then the machines have not been able to ignite any momo…Source: BloombergThe basket of Mag7 stocks face-ripped up to their prior record high but was unable to push through it…Source: BloombergUtes surged today on the ‘Power Up AI’ trade (sponsored by MSFT) but the Energy sector outperformed on the week, while Real Estate lagged bigly (sell the news on rate-cuts?)…Source: BloombergTreasury yields were mixed on the week with the short-end actually lower (admittedly only 1bps) while the long-end rose 9bps…Source: BloombergThe last time yields rose after a 50bps rate cut was in October 2008 and things didn’t end too well that time.But there’s no recession ahead according to stocks, despite the market pricing in massive rate-cuts…The yield curve dramatically bear-steepened this week to its steepest since May 2022…Source: BloombergThe upper-left part of the rates volatility surface, the area most sensitive to central bank policy rates, has been heavily offered over the past couple of sessions after the Federal Reserve appeared to rule out a continued course of half-point rate cuts and reflecting a more measured policy approach for the rest of this year and into next year.Source: BloombergDespite major volatility, the dollar index ended the week unchanged…Source: BloombergCrude oil prices rallied strongly this week off three-year lows as ‘tank bottoms’ loom at Cushing. This was oil’s best week since Oct 2023.Source: BloombergBitcoin had a big week (best two weeks since July), pushing back above $64,000 to one-month highs…Source: BloombergThis was the best week for ETH relative to BTC since May (when the ETH ETFs launched)…Source: BloombergGold soared to new record highs today, above $2600 (with the best two weeks since April)…Source: BloombergFinally, one can’t help but wonder if we are about see That 70s Show replay in CPI…Source: BloombergIs global liquidity about to explode once again to enable that re-ignition of inflation?Source: Bloomberg…or how much do stocks have to fall before The Fed Put is triggered?Bear in mind that stocks have NEVER been more expensive relative to the economy (total US market cap back up to 200% of GDP…Source: BloombergBuffett would be rolling in his grave if he were dead!More By This Author:Bank Deposits And Money-Market Funds See Sizable Outflows As Stocks SurgeIntel Shares Soar On Report Of Qualcomm Takeover InterestFedEx Crashes After Missing Across The Board, Cutting Guidance On “Weaker Demand Trends”