Update (1640ET): House GOP chaos continues after Rep. Tim Emmer (R-MN) - who earlier in the day won an internal ballot for nominee - dropped out, CNBC reports.

As The Hill notes;

Emmer won the GOP nomination over House GOP Vice Chairman Mike Johnson (La.) in a secret ballot 117-97, but in a secondary roll call vote 26 Republicans voted present or for another person, according to House GOP Conference Secretary Lisa McClain (R-Mich.).

If all members vote present and for a specific candidate, Emmer could only afford to lose four Republicans and still win the Speakership on the House floor.

Emmer's withdrawal after a group of Republicans made clear they wouldn't back him on the House floor. The move also come after former President Trump called Emmer a "RINO," and said that voting for him "would be a tragic mistake."

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After kicking Jim Jordan (R-OH) down an elevator shaft, House Republicans have elected majority whip Rep. Tom Emmer (R-MN) as the GOP speaker nominee on the fifth ballot in an internal race which drew nine Republican candidates.

Emmer's nomination now moves to the House floor, where he will need at least 217 votes to pass.

The other caandidates were Reps. Jack Bergman, Mich.; Byron Donalds, Fla.; Tom Emmer, Minn., Kevin Hern, Okla., Mike Johnson, La.; Gary Palmer, Ala.; Austin Scott, Ga.; and Pete Sessions, Texas.

As Just the News notes, Rep. Dan Meuser (R-PA) dropped out of the race Monday evening, while Palmer dropped out Tuesday.

Each candidate signed a unity pledge to support the speaker nominee on the House floor - however it doesn't appear that he'll have the votes needed at this stage.

EMMER lacks 217 behind closed doors lawmakers say

— Erik Wasson (@elwasson) October 24, 2023

According to the report, the top four candidates on the first, second and third ballot were reportedly Emmer, Johnson, Donalds and Hern.

The GOP-controlled lower chamber has been without a speaker for nearly three weeks after Rep. Kevin McCarthy was ousted after 8 GOP members joined with Democrats.

According to Rep. Mike Gallagher (R-WI), there's a "level of exhaustion setting in" the GOP conference.

"I think there’s like, maybe more accurately, a sense of gravity given the many things we have to get done over the next two months, ranging from defense appropriations to dealing with a supplemental FISA reform and the Farm Bill," he said, referring to the Foreign Intelligence Surveillance Act.

Rep. Don Bacon (R-NE) - who refused to back Jim Jordan, said that after the nominee is chosen, "Then we got to figure out will people consolidate behind the leader, and they should. I hope they do."

PMI beats caught the headlines but most missed the big tumbles in the regional Fed surveys which is starting to drag 'soft' survey data lower...

Source: Bloomberg

But, crypto was the story du jour with Bitcoin soaring over $2500 to top $35,000 for the first time since May 2022...

Source: Bloomberg

We discussed catalysts for the move in detail here, but note on the day, BTC did come back a little after tagging $35,000...

Source: Bloomberg

Ethereum also rallied early on but gave a lot of its gains back, as ETH relative to BTC plunged back near Jun 2022 spike lows...

Source: Bloomberg

Stocks were stronger overnight - because WW3 hadn't started - then ramped on better than expected PMIs (see here for that malarkey) but that stalled into the European close sending stocks all the way to unchanged and to the lows of the day. From there they bounced with Nasdaq leading the charge ahead of tonight's GOOGL, MSFT earnings...

The S&P broke back below its 200DMA, but found support...

Thanks in large part to a giant short squeeze at the open...

VIX was clubbed a baby seal once again, back down to almost an 18 handle from above 23 at Monday's open....

As Nomura's Charlie McElligott notes: "The Vol selling in Equities Options space has continued at an unrelenting pace these past 2 sessions, as funds look to exploit the recently “rich” VRP off the back of 1) the shock FCI tightening risking a “cycle-turn,” 2) geopol stress “fat tails” and 3) the legacy VIX Dealer “short upside convexity” problem which has made Index iVol so suddenly “squeezy,” evidenced by recent “extreme VIX Beta to SPX” and Vol of Vol."

Bonds were mixed on the day with the long-end outperforming (30Y -5bps, 2Y +5bps), which leaves the 2Y yield alone higher on the week...

Source: Bloomberg

The 30Y yield closed back below 5.00%...

Source: Bloomberg

Which, obviously, flattened the yield curve dramatically with 2s30s now inverted again...

Source: Bloomberg

The dollar bounced hard off its pre-CPI lows, erasing all of yesterday's tumble...

Source: Bloomberg

Gold was basically flat on the day (in USD) but not in JPY where it reached a new record high...

Source: Bloomberg

Oil was pummeled ahead of tonight's API data, because WW3 never erupted?

As Bloomberg's Eddie Spence notes, gold’s explosive rally since Hamas’s attack on Israel has moved in tandem with oil prices, a sign some traders are hedging against stagflation.

The 15-day correlation between spot bullion and Brent crude is now at the highest in over a year. The relationship between the two commodities typically strengthens when oil begins to spike.

Finally, are stocks starting to catch down to central bank balance sheet realities?

Source: Bloomberg

...or will The Fed (et al.) pivot to QE before that gaping spread compresses from above?