Breaking: Everything… In Biggest Stock-Selling Day In 20 Years

At its lows today, this was the market’s biggest down day since 1987 (by the close the biggest since Oct 2018)!

Source: Bloomberg

In a reflection of the total loss of faith policymakers among BTFDers, @Sentimentrader notes that:

This is the only day in the history of S&P 500 futures that they gapped down more than -5% and didn’t close above the open.

Did the 11-year-long, almost unstoppable bull run that started on March 9, 2009, just end on March 9, 2020?

Source: Bloomberg

Here’s another stat for the record books. Total U.S. Trading volume, on a 10-day moving average basis, is now higher than during the meltdown in 2008. Volume is another whopper today, over 17 billion shares.

Source: Bloomberg

Thanks to the market perceiving President Trump’s response as remaining one of “denial” of the scale of the problem, and concerns that any fiscal stimulus will be underwhelming, things were already anxious as markets opened Sunday night. But the situation was worsened considerably as both Russia and Saudi Arabia stood poised to flood the market with cheap crude (supply) in an all-out price war just as the coronavirus is spurring the first contraction in demand since 2009.

“The situation we are witnessing today seems to have no equal in oil market history,” said IEA Executive Director Fatih Birol.

“A combination of a massive supply overhang and a significant demand shock at the same time.”

Oil futures fell by about one-third in New York and London on Monday, the biggest drop since the Gulf War in 1991, before pulling back to a 20% decline.

Source: Bloomberg

Crashing below $30!

US markets were a bloodbath from Sunday night future open (ETFs showed things were uglier than the 5% limit down in futs) and stocks were unable to show any real resilience…

Early selling pressure today – judged by NYSE’s advance-decline line – was at its strongest since the DotCom collapse…

Source: Bloomberg

Extreme Fear has reached its extreme-est level…

Source: CNN

The shrill cry from the asset-gatherers and commission-rakers – “TURN THE BUY-THE-DIP MACHINES BACK ON!!!!”

[youtube https://www.youtube.com/watch?v=j4SRsGn14PI]

Chinese stocks – somewhat uncharacteristically – tumbled overnight… finally…

Source: Bloomberg

European stock markets just suffered their worst decline since Lehman… Oct 2008…

Europe is now down over 22.5% – a bear market – from highs just 3 weeks ago…

Source: Bloomberg

The selling was absolutely across the board…

Source: Bloomberg

European banks crashed to their lowest since March 2009… but judging by EU bank credit, there’s more to come…

Source: Bloomberg

And European credit is crashing…

Source: Bloomberg

Gilt yields fall below 0% in two- and five-year segments, with BOE’s buyback seeing the institution buy at a sub-zero rate

Source: Bloomberg

But, Italian yields surged, rising 30bps in 2-year to 10-year segments.

Source: Bloomberg

And US markets were an ever bigger bloodbath… The Dow dropped 2019 points!!! Worst day for stocks since Oct 2008

And while China began to drop, US and Europe lead the way since the start of the Covid-19 headlines…

Source: Bloomberg

Russell 2000 entered a bear market today (down 23.5% from January highs), dropping most since Lehman…

Source: Bloomberg

Dow Transports have erased all of the post-Trump election gains…

Source: Bloomberg

S&P broke key technical support…

Source: Bloomberg

All the major US equity indices have broken below their 200DMA…

US Banks were crushed today…

Source: Bloomberg

The big banks are down a stunning 30-40% in the last 3 weeks…

Source: Bloomberg

The Energy sector suffered its biggest loss ever, crashing over 18% on the day…

Source: Bloomberg

Virus-related sectors have been destroyed…

Source: Bloomberg

FANG stocks were slammed most since Oct 2018 (and closed ugly)…

VIX exploded above 60 today – the highest since Lehman…

Source: Bloomberg

And VIX’s term structure is the most inverted since Lehman…

Source: Bloomberg

Credit markets have completely collapsed (but are slightly under-pricing relative to VIX) – today was biggest jump in IG credit since Lehman…

Source: Bloomberg

Today’s crash in Treasury yields was the biggest since Nov 2008

Source: Bloomberg

At its trough in yields overnight – it was the biggest yield drop in history…

Source: Bloomberg

10Y yields hit their lowest ever at 31.3bps…

Source: Bloomberg

The entire Treasury curve is now below Fed Funds…

Source: Bloomberg

The Yield curve crashed into inversion as yields plunged overnight but stabilized later – still flatter on the day…

Source: Bloomberg

 

Amid all this carnage, the dollar ended only modestly lower…

 

Source: Bloomberg

Cryptos were crushed along with almost everything else…

Source: Bloomberg

Gold managed very modest gains, copper and silver were down over 2% as crude collapsed…

Source: Bloomberg

Gold/Oil spiked to its second highest level ever today…

Source: Bloomberg

Once again oil’s drop today coincided with dollar weakness and in fact, as Bloomberg details, the relationship between oil and dollar has turned on its head: The lower the crude prices are, the weaker the U.S. currency.

Source: Bloomberg

Since the turn of the century, the two have typically had a negative correlation. A strong dollar has meant weak oil prices and vice versa, partly because oil is priced in dollars. Granted, the relationship hasn’t been stable in recent years, but a positive correlation has been rare.

There could be several explanations:

• For one, lower oil prices add deflation pressure and lower the bar for the Fed to ease monetary policies.

• Second, with the U.S. a net energy exporter now, weaker oil prices reduce investment in the shale industry.

• Third, oil prices signal weak global demand, causing unwinding of carry-trade positions funded by the euro.

And finally, we wonder – has Ray Dalio lost his touch?

Source: Bloomberg

And don’t forget it’s also the anniversary of 1933’s Banking Crisis Holiday

h/t @Not_Jim_Cramer

And in case you’re wondering. The 2K analog is holding very well… implying we should get a decent bounce here before the finally catastrophic collapse…

Source: Bloomberg

The market is now demanding 3 rate-cuts at or before the next Fed meeting (on March 18th)…

 

Source: Bloomberg