Bonds, Bitcoin, & Big-Tech Bid As Small Caps Continue To Slide

A quite day on the macro front early on (JOLTS was ugly again), spooked only by more crackdowns by Beijing on China’s big-tech companies, was interrupted (only modestly) by Fed Minutes hinting at tapering to come but just enough dovishness to mean nothing at all.

Nasdaq’s Golden Dragon China Index plunged to 8-month lows (down over 35% from the February highs)…

Source: Bloomberg

But “all is well”…

Because US big-techs rallied once again (growth) as Small Caps (value) extended their losses…(NOTE the same pattern yesterday with a big drop at the open and dip-buyers at the European close – Small Caps just couldn’t hold it this time)…

A reminder of how we got here – probably just a coincidence…

“Most Shorted” Stocks were hammered lower today…

Source: Bloomberg

Bonds were bid once again…

Source: Bloomberg

With 10Y Yield down to 1.29% at its lows and no serious bounce on the Fed Minutes…

Source: Bloomberg

The long-end yields are back at their lowest since February…

Source: Bloomberg

The dollar managed gains on the day but gave some back into and after The Fed Minutes…

Source: Bloomberg

Bitcoin rallied back up to $35k once again but could not hold that level… again…

Source: Bloomberg

Gold futures rallied, despite the dollar gains, pushing back above $1800…

WTI extended yesterday’s losses, back below $72 ahead of tonight’s API inventory data…

Finally, we note that as oil has soared, it appears US equity investors are getting anxious about inflation. As Bloomberg notes, concerns about that very dynamic can already be seen when you consider the 66-day correlation between the S&P 500 Index and Brent crude.

Source: Bloomberg

While normally positive because oil demand tends to come arm-in-arm with strong economic growth – which also fuels the stock market – it’s now negative, something we haven’t seen in almost four years.