Trade-Talks are on again… on like Donkey Kong if markets are to be believed.
So to explain what happened today, the following chart should help (trade accordingly):
Which brings to mind…
[youtube https://www.youtube.com/watch?v=ilcRS5eUpwk]
Chinese stocks opened dramatically higher but faded into the close of the afternoon session…
Source: Bloomberg
European stocks soared also, led by Germany (trade hopes) on the day…
Source: Bloomberg
German 30Y Yields broke back above 0.00% for the first time in over a month…
Source: Bloomberg
US equity markets were all higher on the day, smashing above Trump tariff tantrum levels…
And as futures show, the bulk of the gains overnight…
Notably, today’s buying extravaganza lifted the S&P back to unchanged since The Fed cut rates in July…
All the majors crossed above key technical levels today (Russell 2000tagged its 200DMA but was unable to hold above it)
Cyclicals dominated as the odds of a China trade deal surged…
Source: Bloomberg
Shorts were dramatically squeezed yet again…
Source: Bloomberg
And then there was Slack which crashed over 10% after cutting guidance but was panic-bid back to unchanged after the open…
Bonds don’t seem to be buying it though…
Source: Bloomberg
Treasury yields surged today with the long-end modestly outperforming (30Y +8bps, 2Y +11bps)…
NOTE – between a record high $74 billion calendar (rate-locks), Fed POMO bid disappearing due to “technical difficulties”, trade-deal hopes, and the better-than-expected ISM services data (despite everything else being weaker)
Source: Bloomberg
Today was among the biggest absolute spikes in 10Y (above 1.50%) and 30Y (above 2.00%) Yields since the election in 2016…
NOTE – after the initial spike, yields rallied back lower.
Source: Bloomberg
The yield curve steepened on the day but 3m10Y remains deeply inverted…
Source: Bloomberg
The dollar ended the day lower, but roundtripped off overnight lows…
Source: Bloomberg
Yuan is higher overnight but well off the highs, notably divergent from US stocks…
Source: Bloomberg
Cryptos were mixed with Altcoins fading but Bitcoin stable…
Source: Bloomberg
Commodities were mixed with copper best, crude pumped-n-dumped, and PMs weak after the PMI data…
Source: Bloomberg
Gold was hit on very heavy volume…
But silver was worse…
Sending Gold/Silver higher for a change…
Source: Bloomberg
Oil pumped and dumped today after inventory data spiked it up to 5-wek highs briefly…
Finally, we should note that while the market has pushed for more and more easing in recent weeks, since The Fed first cut, the macro-economic data has beaten (admittedly low) expectations dramatically…
Source: Bloomberg
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