Stocks & Bond Yields Tumble On Beijing Blowback, A Fearful Fed, & Billionaire Alarm Bells

For the second day in a row, it was not pretty in equity market land…

Small Caps are worst on the week, followed by Trannies with Nasdaq best but still down hard…

The mega-techs begin to catch down to the “median” stock…

Source: Bloomberg

Three main themes stood out that spoiled the promise of a v-shaped recovery!…

Billionaires are ringing alarm bells – Druck, Tepper, & Lasry – the market’s way overvalued and hopes of (and pricing in) a v-shaped recovery are a fallacy.

Stocks are decoupled from reality…

Source: Bloomberg

Valuation is extreme to say the least (despite the plunge)…

Source: Bloomberg

Trump didn’t like their view…

When the so-called “rich guys” speak negatively about the market, you must always remember that some are betting big against it, and make a lot of money if it goes down. Then they go positive, get big publicity, and make it going up. They get you both ways. Barely legal?

— Donald J. Trump (@realDonaldTrump) May 13, 2020

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A Fearful Fed Chair – Powell warned of a prolonged recession but said no negative rates… we promise! No really, we really really mean it this time… but the economy is really in a bad way and unless we get more fiscal we are cornered… into maybe cutting rates negative..

The market refuses to give up hope for negative rates…

Source: Bloomberg

Which is concurrently crushing bank stocks..

Source: Bloomberg

Beijing blowback is building – China banned Aussie beef imports after questioning COVID source and now has indirectly threatened “punishment measures” after US pension fund pulls China investment and GOP pushes ‘Sue China’ bill over COVID reparations.

For now, it appears vol is striking US more than China… for now!

Source: Bloomberg

The ‘Virus Fear’-Trade has been soaring despite the broad indices recent gains…

Source: Bloomberg

And the most directly affected sectors from the virus were a bloodbath today as hope for “normal” fade…

Source: Bloomberg

Of course the answer from the talking heads, asset-gatherers, and commission-takers…

[youtube https://www.youtube.com/watch?v=nR0lOtdvqyg]

FANG Stocks fell for the 2nd day in a row…

Source: Bloomberg

Riding The Fed’s largesse on long-momo has suddenly failed – the last two days have been the biggest drop in long-momentum since mid-March…

Source: Bloomberg

And other cyclically-positive quant factors faded notably…

Source: Bloomberg

The Dow is back below its 50% crash retracement level…

Dow and Small Caps pushed down towards key technical levels…

VIX surged back above 35…

And the VIX term structure notably inverted…

Source: Bloomberg

It would seem that The Fed can’t save HY bonds everyday (HYG tumbled today and LQD rolled over from a pop open)..

Source: Bloomberg

The yield curve was lower on the day with the long-end outperforming…

Source: Bloomberg

The yield curve notably flattened…

Source: Bloomberg

Another v-shaped recovery in the dollar today…

Source: Bloomberg

Cryptos limped higher once again today…

Source: Bloomberg

Gold jumped notably today as Powell spoke…

Gold in yuan rallied…

Source: Bloomberg

Oil prices were volatile once again with OPEC demand cuts and EIA inventory draws…

 

Finally, where’s the beef?

Source: Bloomberg