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Gold Surges To Best Start To A Year Since 1986 As Stagflation Scare Slams Stocks In Q1
BY TYLER DURDEN
SATURDAY, MAR 29, 2025 - 04:00 AM
Q1 saw a big Global Asset ‘Regional Rebalancing', with money into “Fiscal Expansionists” and stimulators / easers i.e. Europe & China, and money out of “Fiscal Contractionists” i.e. United States as “source of funds”...
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Source: Bloomberg
With one trading day left in the month/quarter - can Monday save the bulls?
Domestically, stagflationary signals grew louder this morning with weaker than expected consumer spending, hotter than expected Core PCE, and surging inflation expectations (thanks to Democrats freaking out)...
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...and if there's one chart to sum up Q1, it is this one - Goldman's Long/Short Stagflation basket has exploded higher...
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Source: Bloomberg
The (stock) markets did not like that double whammy of higher inflation and slower growth (even though we wonder why all those Democrats - who are so terrified of higher prices - are not already spending their money now before Trump's terrible tariffs erase their purchasing power?) plunging today, erasing the week's gains...
As Goldman's trading desk noted - Today felt like a sell everything type of session with > 400 names trading lower in the S&P and a session which has the makings of a low-tick close type of day. The pace of supply both here and from conversations feels a bit more aggressive than of late.
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Source: Bloomberg
...and that dragged all the majors into the red for Q1 with Nasdaq the biggest loser...
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Source: Bloomberg
With today's losses the SPX is now on track for the worst quarter since Q3 '22 (and only the 2nd losing quarter since then). It's different this time... for now...
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Source: Bloomberg
AI has been a shitshow in Q1, triggered initially by the DeepSeek drop...
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Source: Bloomberg
The next week is heavy with event risk and the vol markets know it...
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Source: Bloomberg
The second chart to sum up Q1 is the growing divergence between strong hard data and weak soft data...
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Source: Bloomberg
Interestingly both growth and inflation macro measures are lower in Q1 (today's PCE beat is evident at the end) - this is not stagflation (the inflation fears seem more in the soft data than the hard data br0adly speaking... for now)...
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Source: Bloomberg
Rate cut expectations are significantly higher from the start of Q1... which could well be overly dovish given the stagflationary signals...
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Source: Bloomberg
However, Treasury yields tumbled today - growth concerns trumping inflation fears - having dropped significantly in Q1, with the belly outperforming...
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Source: Bloomberg
Credit markets started to crack in Q1, notably decoupling from equity risk for now...
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Source: Bloomberg
Q1 saw relentless hedging for wider spreads in High Yield ETFs on perception of economic slowdown “cycle turn” risks building - HYG Skew at 99%ile
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The dollar ended Q1 lower, but found support at its 200DMA...
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Source: Bloomberg
Oil prices ended the month unchanged but are lower YTD...
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Source: Bloomberg
Q1 was disaster for crypto, with big gainers like Solano and Ethereum erasing the post-election gains...
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Source: Bloomberg
Bitcoin was lower in Q1 but it is still well above the pre-election levels. Today's tumble broke BTC back below its 200DMA...
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Source: Bloomberg
Silver prices soared in Q1, back above $34...
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Finally, saving the best for last, Gold surged over 16% in Q1, its best start to a year since 1986...
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Source: Bloomberg
...as the barbarous relic topped $3080 - a new record high - today...
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Source: Bloomberg
Is gold demand signaling the end of the U.S. Exceptionalism era?
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