You’d think the White House would realize that juicing economic data is counterproductive. But, it’s the same brain trust that calculated that massive tariffs wouldn’t punish consumers (or voters.)

Maybe they had hoped they could get the rate cuts they needed before the impact had really been felt and/or the economic data had been recognized as fallacious.  In any case, data which argues the economy is doing great sure doesn’t support the more dovish rate cut scenario floating around Wall Street.

Futures are down again this morning after durable goods and GDP prints far exceeded expectations and initial claims came in well below forecasts. This sets up a “damned if you do, damned if you don’t” scenario for tomorrow’s PCE print.

The equities overshoot is rapidly dissolving, driven largely by the bouncing DXY.

continued for members…

If the SMA50 doesn’t hold, the SMA200 is another 400 points lower.

This scenario is also present for SPX.

Naturally, it will depend on whether VIX and VX can break out. Note that VX has closed above its SMA20 only once in the last 3 1/2 months, and the SMA10 has been below its SM20 ever since Jul 2.

But, EURUSD’s breakdown is starting to bite and our 1.12 target is looking better and better. And, it’s not clear that USDJPY can offset it.

In any case, DXY is pushing above its SMA50 and is potentially eyeing its SMA200.

It all boils down to stagflation. And, unless TNX reverses right here and now, it’s going to get scarier as it breaks out.  CL and RB are off a bit today, but they’ve been going sideways for a while.If the 10Y pops above the red TL at 4.2%, the next serious resistance is 4.355%.

And, the 2s10s continues rising toward breakout territory.

Remember, breakdowns cause corrections. Breakouts cause crashes. At this point, us technical types are wondering whether TPTB will be able to prevent one.

Stay tuned…