The Hunt For Red October… Is Over

The Hunt For Red October… Is Over

This is the worst start to Q3 in US equity markets since 2008…

It seems the stock market is playing chicken with The Fed – sell off to force dovish bias that The Fed would be loathe to disappoint BUT rally back to front-run The Fed’s dovish bias and you remove The Fed’s need to be dovish…

Source: Bloomberg

NOTE – the moment the market priced in another 25bps of cuts, stocks soared back.

“the hard part about playing chicken is knowing when to flinch.”

[youtube https://www.youtube.com/watch?v=OEiHxV2JuPw]

China remains closed for Golden Week.

European stocks were lower (with FTSE worst) but chopped around on US ISM before the EU Close (Germany closed today)…

Source: Bloomberg

US markets were just comical – crashing on the dismal ISM data, then exploding higher (on no news) as the funds market priced in more rate-cuts – Nasdaq ended up over 1%!!! (after being down 1% in the morning)…

On the week, all US majors remain red, with Trannies the biggest laggards…

Nasdaq and Dow bounced perfectly off their 200DMA…

And while today’s big drop was bid (as we noted above on the back of market pricing in more easing), Gold remains the biggest winner since ISM Manufacturing tumbled…Gold is up 3%, S&P is down 3%

 

VIX topped 21 intraday again but ended lower on the day (and the term structure remains inverted)

 

“Most Shorted” Stocks soared on yet another short-squeeze…

 

Source: Bloomberg

Momo and Value continues to diverge this week…

Source: Bloomberg

1987 anyone?

Source: Bloomberg

Treasury yields all tumbled today but the short-end dropped dramatically (2Y -10bps, 30Y -5bps)

Source: Bloomberg

30Y Yields pushed back closer to 2.0% again today…

Source: Bloomberg

The 3M10Y yield curve remains inverted (and is the most accurate measure) but 2Y10Y has steepened dramatically this week, which as Jeff Gundlach noted, after the inversion, is the most dangerous time…

Source: Bloomberg

The Dollar fell out of bed on the ISM miss and never filled gap (into the red for the week)…

Source: Bloomberg

With China on holiday all week, offshore yuan is strengthening…

Source: Bloomberg

Cryptos drifted lower today but remain barely positive on the week…

Source: Bloomberg

Precious metals rallied back into the green for the week as crude crumbled further…

Source: Bloomberg

Gold futures tested up to $1525, legging higher on the ISM Services data…

 

WTI Futures traded briefly with a $50 handle intraday.

 

Finally, we will take a brief victory lap as we warned the end of the surge in US macro data would come after the government fiscal year spendfest ended… and indeed, since the end of September, data has collapsed…

Source: Bloomberg

And judging by the plunge in CEO confidence, things are about to get a whole lot worse in ‘hard’ data…

https://platform.twitter.com/widgets.js

While top-down is not pretty, bottom-up is getting ugly too…

And just in case you weren’t nervous about tomorrow’s payrolls data… ISM Employment data suggests, you should be!

Source: Bloomberg


Tyler Durden

Thu, 10/03/2019 – 16:01


This post has been republished with permission from a publicly-available RSS feed found on Zero Hedge. The views expressed by the original author(s) do not necessarily reflect the opinions or views of The Libertarian Hub, its owners or administrators. Any images included in the original article belong to and are the sole responsibility of the original author/website. The Libertarian Hub makes no claims of ownership of any imported photos/images and shall not be held liable for any unintended copyright infringement. Submit a DCMA takedown request.

Read the original article.

About The Author

Tyler Durden

Zero Hedge's mission is to widen the scope of financial, economic and political information available to the professional investing public, to skeptically examine and, where necessary, attack the flaccid institution that financial journalism has become, to liberate oppressed knowledge, to provide analysis uninhibited by political constraint and to facilitate information's unending quest for freedom. Visit https://www.zerohedge.com

Leave a reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Welcome

Bringing together a variety of news and information from some of today’s most important libertarian thought leaders. All feeds are checked and refreshed every hour and pages auto-refresh every 15 minutes. External images are deleted after 30 days.

Time since last refresh: 0 second

Publish Your Own Article

Follow The Libertarian Hub


Please consider donating using any of the cryptocurrencies below or use the Brave browser to tip using Basic Attention Tokens (BAT). Your anonymous contributions help keep this website running for everyone to enjoy!

Donate

Take Control of Your Domain Names
The Ultimate Managed Hosting Platform

Weekly Newsletter

Newsletter Signup

Subscribe to our newsletter to receive a weekly email report of the top five most popular articles on the Libertarian Hub!

Weekly Newsletter SignupTop 5 Stories of the Week

Subscribe to our newsletter to receive a weekly email report of the top five most popular articles on the Libertarian Hub!