This week’s Bespoke Report newsletter is now available for members.

Man The Barricades! There’s been a revolution in markets and policy since mid-November as policymakers decide to institute regime change with respect to their view of inflation. As a result, markets are diving for cover as bullets (falling commodity prices), bricks (a flattening yield curve), and bats (hawkish talk about the policy outlook) fly. Equities this week broadly reflected this sentiment: stocks rightly plunged on the news from Powell and suffered a number of sharp drops throughout the trading week. Overall the S&P 500 was down 1.2% after a 2.2% drop last week but did so with huge selling across stocks that are most sensitive to a hawkish Fed: hypergrowth, high valuation, recent IPO or SPAC, and related names got hammered as we will discuss later. Commodities markets also buckled as the Bloomberg Commodities Index fell for a third week running; oil and copper are now below their 200-DMA, natural gas posted its worst 4 day run in a quarter century, and grains lurched 4% lower in two sessions earlier this week. Even larger warning signals are coming from the bond market, where yields reacted to a pretty good (if messy) jobs report by plunging 10 bps at the 10y point of the curve; the 2s10s yield curve is now trading at the lowest levels since last December and suffered its biggest four session flattening move in a decade. We discuss all of this and more in this week’s Bespoke Report.

To read this week’s full Bespoke Report newsletter and access everything else Bespoke’s research platform has to offer, start a two-week trial to one of our three membership levels.