Big-Tech Bid, Bitcoin Bust As Bonds & The Buck Go Nowhere

Chinese tech stocks dead-cat-bounce is over after more DIDI headlines and more restrictions over the weekend…

Source: Bloomberg

Overall almost $1 trillion of market value has been wiped out in the latest sell off in China Tech…

But US Stocks managed gains after last week’s mixed bag with Small Caps showing the biggest swings intraday (and managing to scramble and hold on to green)…

Record highs for S&P, Dow, & Nasdaq.

But the improvements are slowing for stocks and the runs are not extending intraday as Goldman’s Chris Hussey notes, the bar for catalysts that drive meaningful upside for the S&P 500 from here is likely higher now vs earlier this year as investors navigate a ‘peak growth – peak liquidity’ backdrop.

And rather notably, all these gains have come as the number of NYSE new 52-week highs has plummeted to its lowest since Nov 2020…

Source: Bloomberg

And the S&P’s breadth is even more dismal…

Source: Bloomberg

As Morgan Stanley noted, we think the recent decline in rates, commodities, and cyclical stocks geared to economic growth is indicative of a market that is getting worried about the sustainability of the pace of recovery, especially relative to expectations. Perhaps the greatest warning sign coming from the market is the increasing deterioration in breadth as the index makes new highs every week. While the decline in long end rates has appropriately benefitted large cap growth stocks over the past month, we would suggest lower rates from here will no longer prove to be beneficial to stocks as it will signal these growth fears are coming true.

Makes you wonder when the rope gets cut?

Financials outperformed ahead of Bank earnings beginning tomorrow…

Source: Bloomberg

SPCE crashed back to earth from soaring too close to the sun in the pre-market…

The Dow traded back above 35k for the first time since early May’s spike highs…

 

After a tempestuous few days last week, bonds barely budged today with a modest 1-1.5bps rise in yields focused mostly in the short-end…

Source: Bloomberg

The rebound in yields appears to have stopped as the 10Y auction was striog today…

Source: Bloomberg

The dollar ended very marginally higher after a pump’n’dump during the day…

Source: Bloomberg

Cryptos tumbled, with Ethereum testing back down towards $2000 and the lowest since late June…

Source: Bloomberg

Bitcoin also broke down, back below $33k…

Source: Bloomberg

Despite the dollar going nowhere, commodities were mixed with Silver the only major to end with gains as crude and copper disappointed bulls…

Source: Bloomberg

Finally, we note that today was the S&P 500 cross a notable level – exactly a double (up 100%) from March 2020’s spike lows…

Source: Bloomberg