Bond Yields Crash To Record Lows, Stocks Barely Bounce After Bloodbath

Bond Yields Crash To Record Lows, Stocks Barely Bounce After Bloodbath Read MORE

After the 4th biggest point drop in US stock market history, this is all equity dip-buyers could manage? This won’t end well…

China was mysteriously panic-bid overnight after plunging at the open after US stocks crashed…

Bond Yields Crash To Record Lows, Stocks Barely Bounce After Bloodbath

Source: Bloomberg

More stimulus promises did nothing to help European stocks…

Bond Yields Crash To Record Lows, Stocks Barely Bounce After Bloodbath

Source: Bloomberg

EU banks broke to a new cycle low…

Bond Yields Crash To Record Lows, Stocks Barely Bounce After Bloodbath

Source: Bloomberg

After ECB promised more stimulus, Bund yields crashed to a stunning record low of -71bps (down 21 of last 24 days)…

Bond Yields Crash To Record Lows, Stocks Barely Bounce After Bloodbath

Source: Bloomberg

Also of note, in the crazy world of negative rates, the 50Y EU Swap rate has dropped below zero for the first time ever…

Bond Yields Crash To Record Lows, Stocks Barely Bounce After Bloodbath

Source: Bloomberg

US equities whipsawed by headline-reading algos early on as China threatened retaliation, WMT surged, and China offered some hope for a deal before Trump confirmed on his terms…

Bond Yields Crash To Record Lows, Stocks Barely Bounce After Bloodbath

An afternoon buying spree (paging Steve Mnuchin) lifted The Dow, S&P, and Nasdaq into the green for the day

Bond Yields Crash To Record Lows, Stocks Barely Bounce After Bloodbath

On the week, Trannies are the biggest losers

Bond Yields Crash To Record Lows, Stocks Barely Bounce After Bloodbath

 

The Dow bounced back above its 200DMA…

Bond Yields Crash To Record Lows, Stocks Barely Bounce After Bloodbath

Small Caps tumbled to May lows and bounced a smidge, dramatically below the 200DMA…

Bond Yields Crash To Record Lows, Stocks Barely Bounce After Bloodbath

 

The Dow was rescued by WalMart’s big gains…

Bond Yields Crash To Record Lows, Stocks Barely Bounce After Bloodbath

 

But GE crashed on Markopolous exposures…

Bond Yields Crash To Record Lows, Stocks Barely Bounce After Bloodbath

 

Defensives dominated the days…

Bond Yields Crash To Record Lows, Stocks Barely Bounce After Bloodbath

Source: Bloomberg

 

Source: Bloomberg

Treasury yields tumbled on the day (again) with the short-end outperforming this time (2Y -7bps, 30Y -3bps)…

Bond Yields Crash To Record Lows, Stocks Barely Bounce After Bloodbath

Source: Bloomberg

30Y broke below 2.00% for the first time ever (and 2Y broke below 1.50% for the first time since 2007 as did 10Y)…

Bond Yields Crash To Record Lows, Stocks Barely Bounce After Bloodbath

Source: Bloomberg

And the 10Y Yield is testing back towards record lows…

Bond Yields Crash To Record Lows, Stocks Barely Bounce After Bloodbath

Source: Bloomberg

The yield curve story was mixed – 2s10s rose back from inversion…

Bond Yields Crash To Record Lows, Stocks Barely Bounce After Bloodbath

Source: Bloomberg

BUT remember the 3m10Y – which is the most accurate recession indicator – remains deeply inverted…

Bond Yields Crash To Record Lows, Stocks Barely Bounce After Bloodbath

Source: Bloomberg

What a difference a year makes – entire curve now below 2.00% but entire curve was above 2.00% exactly one year ago…

Bond Yields Crash To Record Lows, Stocks Barely Bounce After Bloodbath

Source: Bloomberg

And TIPS markets are pricing in a deflationary future…

Bond Yields Crash To Record Lows, Stocks Barely Bounce After Bloodbath

Source: Bloomberg

Overnight weakness in the dollar ramped higher once again today (starting to see a pattern here)…

Bond Yields Crash To Record Lows, Stocks Barely Bounce After Bloodbath

Source: Bloomberg

Yuan weakened modestly overnight (even as the PBOC fixed it stronger again)…

Bond Yields Crash To Record Lows, Stocks Barely Bounce After Bloodbath

Source: Bloomberg

Which is notable as China appeared to start trying to squeeze the shorts with a liquidity squeeze overnight…

Bond Yields Crash To Record Lows, Stocks Barely Bounce After Bloodbath

Source: Bloomberg

And it appears Hong Kong authorities intervened to keep the HKD away from the low-end of the USD peg…

Bond Yields Crash To Record Lows, Stocks Barely Bounce After Bloodbath

Source: Bloomberg

Cryptos got hit hard overnight but bounced back as Europe opened…

Bond Yields Crash To Record Lows, Stocks Barely Bounce After Bloodbath

Source: Bloomberg

But Bitcoin bounced back above $10k by the end…

Bond Yields Crash To Record Lows, Stocks Barely Bounce After Bloodbath

Source: Bloomberg

Oil and gold diverged once again today as did copper (lower) and silver (higher)…

Bond Yields Crash To Record Lows, Stocks Barely Bounce After Bloodbath

Source: Bloomberg

WTI is back below $55…

Bond Yields Crash To Record Lows, Stocks Barely Bounce After Bloodbath

Gold futures’ bounce off $1500 continues…

Bond Yields Crash To Record Lows, Stocks Barely Bounce After Bloodbath

Global Negative-yielding debt topped $16 trilion for the fiorst time ever, and gold tracked it perfectly (but bitcoin appears to have decoupled for now)…

Bond Yields Crash To Record Lows, Stocks Barely Bounce After Bloodbath

Source: Bloomberg

Treasury yields imply gold should be higher or copper lower…

Bond Yields Crash To Record Lows, Stocks Barely Bounce After Bloodbath

Source: Bloomberg

Finally, we have seen the emergence of another ominous Hindenburg Omen…

Bond Yields Crash To Record Lows, Stocks Barely Bounce After Bloodbath

Source: Bloomberg

We all know who to blame… right Mr. Trump?

The Fake News Media is doing everything they can to crash the economy because they think that will be bad for me and my re-election. The problem they have is that the economy is way too strong and we will soon be winning big on Trade, and everyone knows that, including China! “

At least The Fed wasn’t immediately blamed this time.

Bond Yields Crash To Record Lows, Stocks Barely Bounce After Bloodbath