US equities surge after shrugging off hot CPI figure in chaotic session

US stocks ripped higher after a hot CPI figure saw the S&P 500 open over 2% down from the previous close only to finish up 2.6%. This came despite an Inflation figure that was higher than analysts expectations (8.1% YoY) at an 8.2% increase from September last year and a 40 year high.

S&P 500:

This is only the 5th time in history the S%P 500 has done this, opening over 2% down to finish over 2% up, two of those happened in the depths of the GFC highlighting the turmoil in risk markets currently.

Treasuries were just as chaotic as stocks today with the US 10 year T-Note yield spiking above 4% on the CPI print, then a complete reversal even as rate hike odds at the Feds November meeting jumped to a 99% expectation of a 75bp move up.

US 10 Year T-Note yield:

Price moves in other risk assets were almost identical, with large moves on the CPI print, retracing some or all of the CPI move as the session went on.

Bitcoin followed a similar path to stocks with a spike down on CPI followed by a buying panic as it again found strong support in the 18000 – 19000 zone back above $19000…

Gold ended the day lower despite US weakness, though did recoup most of the CPI print drop.

XAUUSD:

Oil prices dumped, then pumped hard after the CPI print as a weaker US dollar coupled with the big equity turn-around bolstered crude.

USOUSD:

In todays economic news, some more big US figures in retail sales and consumer confidence will be released today. They probably wont generate as much fireworks as yesterdays long awaited CPI figure, but with a Federal Reserve in a “data dependant” mode, we could still see some volatility.