Gold Reaches New Record High Amid 'Goldilocks' Data

Micro Outperforms Macro

Goldman Sachs' trading desk reported that on the day, micro outperformed macro as trading volumes surged. However, it's important to note that there is a month-end pension rebalance with $11BN of equities for sale through tomorrow. Internet names, such as GOOGL, SNAP, and RDDT, outperformed following their results, while semiconductors were broadly weaker after both AMD and QRVO missed their targets. Obesity/GLP-1 names were another significant focus following LLY's collapse this morning. The stock is a maximum long for the fast money community.

Macro Data Not Ignored

Despite the focus on micro, macro data was not overlooked. ADP jobs soared, doubling expectations, which is certainly not a dovish sign. GDP missed expectations, but this was largely ignored as consumption soared. Core PCE was hotter than expected, but again, this was overlooked as it was down quarter-on-quarter. Pending Home Sales also soared, but mortgage rates have risen significantly since the data was released.

US Macro Surprise Data Rises

US Macro Surprise data continues to rise, which doesn't look like 'Goldilocks' - it looks more like 'animal spirits' ignited by a desperately dovish Fed's 50bps cut prompting excessively easy financial conditions. The market is gradually erasing the dovishness priced in after The Fed cut, with 2025 expectations now down to less than 3 cuts.

Gold Hits New Record

Whether it's Goldilocks or not, gold was bid again, hitting another new record nominal high. On the day, all the US majors shot higher on the (Goldilocks) GDP data, but this didn't last as reality set in. By the close, everything was red, with Nasdaq being the biggest loser. The S&P continues to tread water near the highs while VIX remains notably elevated into next week.

Chaotic Day in Bond-Land

It was a chaotic day in bond-land, ending with very mixed yields as the long-end dramatically outperformed. The belly is the big laggard this week as bonds seem to think The Fed made a policy error. This drove the yield curve down near recent lows, and something big appears to be building up behind the scenes.

Bitcoin and Oil Prices

The dollar broke down from its coiling flag pattern yesterday, but chopped around again today. Bitcoin came off record highs but found support around $72,000. Oil prices managed gains on the day but remain well down from before the "peace is here" collapse on Monday.

The Trump Trade

Finally, The Trump Trade continued to accelerate, hitting a record spread to Kamala. Is time running out for an October Surprise to actually bring "hitler" down? Or did Biden just self-immolate with his 'garbage' gobbledygook?

Bottom Line

The market's response to the 'Goldilocks' data has been intriguing, with gold hitting a new record high and US majors initially shooting up before reality set in. The chaotic day in bond-land and the ongoing Trump Trade also add to the complexity of the current financial landscape. What are your thoughts on these developments? Share this article with your friends and let's get the conversation started. Don't forget to sign up for the Daily Briefing, which is delivered every day at 6pm.