Trade-Deal Rumorgasm Sparks Stock Meltup To Record Highs, Bond Bloodbath

It’s a deal… again…

Oct 11: NEWS “Trump says the US has come to a substantial phase one deal with China”

Dec 12: RUMOR *TRUMP: GETTING VERY CLOSE TO A BIG DEAL WITH CHINA

Dec 12: RUMOR *U.S. NEGOTIATORS OFFER TO CANCEL NEW DEC. 15 CHINA TARIFFS: DJ

Dec 12: NEWS/RUMOR “Trump says he and China reached a ‘phase one’ trade deal in principle”

And that was good enough for new record highs for stocks (for a brief second, Nasdaq was back to unchanged after the early trade deal rumors faded, but that didn’t last)…

After each surge, algos dragged stocks back to VWAP but the last headline barrage sparked buying into the close…

And there’s only one clip that works for today…

[youtube https://www.youtube.com/watch?v=StTqXEQ2l-Y]

Yuan exploded nine handles higher to four-month highs…

Source: Bloomberg

Sending expectations for a trade deal soaring…

Source: Bloomberg

30Y Yields soared the most in 3 months today…

Source: Bloomberg

Since the “phase one deal” was agreed again on Oct 11th, stocks are alone in their exuberance…

Source: Bloomberg

Cyclicals, as expected, dramatically outperformed…

Source: Bloomberg

Bank stocks soared as rates spiked and the yield curve steepened…

Source: Bloomberg

VIX was clubbed back to a 13 handle…

And as Equity protection costs plunged, so did credit with HY plunging back below 300bps…

Source: Bloomberg

Bond yields smashed higher on the initial rumors – dramatically worse reactions than for gold and stocks…

Source: Bloomberg

Treasury yields exploded higher on the day – all higher on the week now…

Source: Bloomberg

Notably 30Y Yields staled at the pre-Oct-FOMC levels as a strong auction stalled the carnage

Source: Bloomberg

The yield curve steepened dramatically…

Source: Bloomberg

The Dollar ended the day marginally higher after a huge rollercoaster…

Source: Bloomberg

Investors in sterling are the most hedged since the referendum…

Source: Bloomberg

USDJPY surged…

Source: Bloomberg

Yuan’s huge spike broke it back above its 200DMA…

Source: Bloomberg

Cryptos rallied on the day but remain lower on the week…

Source: Bloomberg

Copper and Crude soared on the trade rumors, PMs dumped, but silver managed to bounce back…

Source: Bloomberg

Gold was chaotic today – surging above payrolls and running stops before the trade rumors hit and it collapsed…

And while gold was down, silver managed to hold on to decent gains…

Gold also tumbled in yuan terms…

Source: Bloomberg

Finally, as the S&P 500 Index pushes to record highs, trading volume is drying up in typical fashion for the final weeks of a year…

Source: Bloomberg

As Bloomberg notes, in another sign of a slowdown, the SPDR S&P 500 ETF Trust has seen fewer than 100 million shares traded for 42 straight days, the longest stretch since 2007.

Do you believe in miracles (and coincidences)? 2019=2013

Source: Bloomberg