Stocks Puke Back Overnight Dovish BoJ Gains; Bond Yields & Black Gold Rise
For a few brief hours overnight, everything was awesome again after the BoJ folded like a broken lawnchair, dovishly backing away from any rate-hikes until market stability resumed.
USDJPY spiked, equity futures spiked higher, and da bullz jumped in with both hands and feet. All that lasted until the US cash equity market opened and the selling began... was escalated by an ugly 10Y auction, and increasing tensions in Ukraine/Russia and the MidEast.
By the close, all the majors were at the lows of the day with Small Caps and Nasdaq the biggest losers (swinging from +2% to -1%)...
...with US equities and USDJPY completely decoupling...
Source: Bloomberg
Nasdaq/Russell 2000 remains back in its recent range with the rebound stalling...
Source: Bloomberg
The S&P 500 tested up to its 100DMA this morning then plunged back lower...
The Dow actually tested above its 50DMA at the open today, but was them pummeled back below its 100DMA...
Mag7 and 'Most Shorted' stocks were both sold out of the gate after gapping higher at the open.
Goldman's trading desk noted that volumes were muted (tracking -20% vs the trailing 5%) and S&P top of book (liquidity) continues to be extremely poor, sitting around to $4mm level -63% vs the 20dma.
Overall floor is flat, with HFs and LOs both skewing better for sale.
LOs better to buy across Tech, Hcare, and Macro Products vs selling Consumer Discretionary and Fins.
HFs are better sellers across Hcare, Fins, and Industrial, with short ratios extremely elevated within macro products. HFs buying tech and Comms Svcs.
VIX pushed back higher once again, testing up towards 30...
Source: Bloomberg
Treasury yields were higher across the board today with the long-end unperforming (30Y +8bps, 2Y +3bps), not helped by a very ugly tail at the 10Y auction. Since payrolls, yield have basically roundtripped to unchanged (aside from the 2Y)...
Source: Bloomberg
The 2Y yield was stuck at 4.00% once again...
Source: Bloomberg
Rate-cut expectations dropped for 2025 but were flat for 2024...
Source: Bloomberg
Crude oil pries rallied today with WTI testing up toward $76, well off the six-month lows set earlier in the week...
Source: Bloomberg
The dollar managed modest gains today thanks to the JPY weakness but there was no follow-through...
Source: Bloomberg
The small gain for the dollar meant a small loss for gold on the day (with the precious metal unable to hold above $2400)...
Source: Bloomberg
Bitcoin tested up to around $58,000 overnight but selling pressure hit during the US session...
Source: Bloomberg
Finally, the carnage in commodities continues to send warning messages...
Source: Bloomberg
...with spot commodity prices one-percent away from three year lows, it's not a message of a 'soft landing'.