Stocks & Silver Soar For 5th Straight Month, Bonds & Dollar Dumped

August 2020’s 7.3% surge in the major US market index is the largest August gain since 1984 (when the S&P 500 rose 10.63%), but as the chart below shows Trannies almost doubled those gains…

Source: Bloomberg

Crazy rotation day today (Nasdaq ripped and Dow and Small Caps slammed at the cash open as S&P clung to unch) but everything collapsed into a really ugly close…

While this broke the S&P’s streak of gains (would have been the longest streak since April 2019), it was still the 5th straight monthly gain…

“Do you want to play this game?”

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

And that strong month sent The Dow back into the green for 2020… but today’s weakness took it back red…

Source: Bloomberg

All thanks to an epic squeeze in the most-shorted stocks (more than doubling the S&P’s performance)…

Source: Bloomberg

The 5th month in a row closing at record highs…

Source: Bloomberg

With the strength being concentrated in fewer and fewer stocks…

Source: Bloomberg

As AAPL nears the same size as the entire Russell 2000!!!!

Source: Bloomberg

TSLA up 75% in August… bwuahahaha!!!

Source: Bloomberg

VIX was up on the month (despite soaring stocks)

VIX was higher on the day again (biggest jump since July 13th), continuing to decouple with stocks…

Source: Bloomberg

As the correlation between stocks and VIX reaches its highest since volmageddon in 2018

Source: Bloomberg

It was an ugly month for bonds with the long-end up over 25bps (small rotation in the last day helped a lot as rotation began…

Source: Bloomberg

In fact August was the worst relative performance of bonds to stocks since Oct 2011…

Source: Bloomberg

10Y Yields spiked 17bps on the month – the biggest absolute monthly spike since Sept 2018 – and oscillated around 70bps thanks to some rotation today (30Y back above 1.50%)…

Source: Bloomberg

But still some context for this rate move is needed…

Source: Bloomberg

Breakevens ripped higher for the 5th straight month (and up 7 days in a row) to their highest since May 2019…

Source: Bloomberg

Real yields ended notably lower (down from -1.00% to -1.10% on the month) signaling more upside for gold…

Source: Bloomberg

The dollar was pummeled for the 5th straight month to its lowest since May 2018…

Source: Bloomberg

Cryptos were mixed with Ethereum strong (DeFi boom), Bitcoin Cash weak, and Bitcoin small gains…

Source: Bloomberg

Copper and Crude had a strong month, gold ended flat, silver the big winner…

Source: Bloomberg

Gold rallied back to last week’s Powell-spooked highs today…

But Gold ended the month unchanged…

Source: Bloomberg

But despite a big roundtrip early on, Silver rallied notably on the month…

Source: Bloomberg

Which meant the Gold/Silver ratio cratered (for the 4th month in the last 5)…ending the month below 70x at the lowest level (silver strongest relative to gold) since March 2017…

Source: Bloomberg

And finally there’s this!

Source: Bloomberg

And this…

Source: Bloomberg

And this…

• *BULLARD: WANT TO GUARD AGAINST ASSET BUBBLES GOING FORWARD

Because it’s different this time…

Source: Bloomberg

Probably nothing!