BLOG

Seemed appropriate...

All of a sudden, 'stuff' matters:

  • Powell hawkish

  • Trump lawyer resigns

  • Trump trade wars start

  • Funding market stress surges

  • Credit markets spike

  • Facebook new lows

  • Tech tax and regulation

The Dow dumped over 700 points on massive volume, broke below it 100DMA to its lowest since Feb 9th...and lowest close since February 8th's crash lows...

 

Well that re-escalated quickly...

 

Chinese tech stocks tumbled...

 

European stocks were ugly (UK's FTSE at lowest since 2016)... after the worst PMI in 14 months...

 

As funding market stress ripples through the credit markets (bank credit at 6-month wides) and on into the equity markets...

 

US and EU banks are tumbling...


And as the cost of funding soars so buybacks will diminish...

 

So US Stocks suffered heavily...

 

Futures show the various legs lower as trade war announcements overnight, European open, US open, trade war news, Mueller news, and credit crashing sent stocks lower...

 

VIX spiked back above 23 - its highest since March 2nd...

 

The Dow broke below its key triangle support and the Fib 38.2% retrace again today...

 

The S&P 500 broke and closed below its 100DMA...

Bloomberg notes that equities are more or less in free-fall mode now as the closing bell nears, with the S&P 500 tumbling 2.3% as I type. Whether you believe it's trade tensions causing the drop or (like Bill Gross) think it's fallout from Jay Powell's press conference debut, the question is where will it stop? Chart guru Bill Maloney on the Squawkbox has these levels penciled in as possible areas of support: the first is 2,647, the March 2 low. Next up is the Feb. 5 low of 2,638. Below that is the 200-day moving average around 2,584. That is, of course, if the market respects technicals, which is no guarantee when trading gets like this...

 

The S&P, Dow, and Trannies are all back in the red year-to-date...

 

Bank Stocks were battered - so much for goldilocks...

 

Facebook's bounce is over...

 

Steel stocks were clubbed like a baby seal...

 

U.S. investment grade meanwhile, closed yesterday at 106bps, which matches the widest this year. It's wider again today, as you'd expect in a Treasury rally.

 

Breadth in the credit markets is as bad as it gets...

 

Treasury yields tumbled on the day - extending their drop post-Powell (all lower on the week now)...

 

10Y Yields tumbled to a 2.7x% handle intraday

 

Yesterday's knee-jerk steepening in the yield curve has been erased...

 

The Dollar bounced back modestly after yesterday's plunge...

The Mexican Peso dropped most in a month.

 

Trade turmoil sparked the biggest sell-off in Offshore Yuan since Feb (but it remains very rangebound)....

 

Cryptocurrencies slipped lower on the day but Bitcoin remains green on the week...

 

Commodities drifted broadly l;ower as the dollar strengthened...

 

WTI Crude broke out of its longer term triangle pattern...but as the dollar strengthened this afternoon, oil rolled over , back below $65...

 

Additionally, Dr.Copper is not happy at all about the global economy... breaking below its 200DMA

 

One wonders if all that exuberant Chinese commodity speculation is about to catch the economics PhD metal down to reality?