Stocks Dump, Dollar Jumps As Self-Sustaining Recovery Narrative Collapses

Ugly retail sales, industrial production strong, homebuilder sentiment slammed, and the Kiwis locking down over one (yes one) COVID case… All added up to ‘growth scare’ time as US macro data is declining/disappointing at the fastest rate since March 2020…

Source: Bloomberg

It seems that without the government constantly puking cash into Americans’ pockets (for doing nothing) that this ‘blistering recovery’ is just an illusion.

As Goldman’s Chris Hussey noted, putting it all together, the combination of lower-than-expected retail sales and auto production in July, and given an increasingly likely drag on services consumption from the Delta variant, our economists will likely revise our second-half growth assumptions.

After yesterday afternoon’s ridiculous gamma-squeezed meltup in stocks, today was rewind day as all the major indices lost their gains and fell below yesterday’s lows, led by Small Caps. Of course, as is the way of the new normal, around 1300ET everything was suddenly panic-bid again…

Small Caps tumbled down towards their 200DMA and bounced. Nasdaq fell back to its 50DMA and bounced…

TSLA has been clubbed like a baby seal this week…

Overall, the last two days have seen “back to the old normal” stocks hammered relative to “hunker down” stocks…

Source: Bloomberg

Credit markets are not buying whatever stocks have been smoking…

Source: Bloomberg

Treasuries were all over the place again today – with yields dumping overnight then accelerating higher (bonds being sold) after the dismal data hit only to stall at the cash open as stocks puked, ending the day basically unchanged…

Source: Bloomberg

The dollar soared today, scrambling up to last week’s highs and running stops…

Source: Bloomberg

Kiwi hammered overnight as a single case of COVID sparked a national lockdown!!

Source: Bloomberg

Cryptos were lower today with Ethereum trading back to the low end of its recent channel…

Source: Bloomberg

Bitcoin also tested the low-end of its recent range…

Source: Bloomberg

Gold was down today, but only modestly given the big jump in the dollar…

WTI fell back to a $66 handle again today ahead of tonight’s API inventory data…

Finally, VIX started to catch up to VVIX’s warnings this week…

Source: Bloomberg

And don’t forget the debt ceiling is starting to stress the Bill curve…

Source: Bloomberg

‘probably nothing’