‘Recovery’ Bets Battered, Crude & Crypto Crushed As COVID Crisis Goes To ’11’

The week’s price action across almost every market was dominated by one theme – COVID! As lockdowns spread across Europe and cases surge in US Blue states, fears about the ‘recovery’ are roaring back…

WTF chart of the day… European COVID cases went to ’11’…

Source: Bloomberg

And that theme drove a huge wedge in US stocks this week with Small Caps and The Dow down while S&P and Nasdaq rallied. Boeing took 90 points off The Dow today…

The 5% spread between Nasdaq and Small Caps this week was the biggest weekly divergence since Sept 2020. Nasdaq is back its richest relative to Russell 2000 since Nov 2020 (vaccines/election)…

Source: Bloomberg

Value stocks underperformed Growth by almost 4% this week – the biggest weekly spread since June – pushing Value to its cheapest relative to Growth ever…

Source: Bloomberg

“Recovery” stocks were monkeyhammered this week relative to “Stay at Home” stocks (as COVID chaos sweeps across the world again). ‘Recovery’ is down 4 of the last 5 weeks relative to ‘stay home’, and down to its lowest since January’s scare…

Source: Bloomberg

Cyclicals outperformed Defensives on the week but both closed lower…

Source: Bloomberg

“Most Shorted” stocks tumbled for the second straight week (biggest weekly drop since July)…

Source: Bloomberg

After some volatility earlier in the week, US Treasury yields ended the week lower (down around 1-2bps across the entire curve)…

Source: Bloomberg

The COVID chaos sparked the biggest drop in 2-year Treasury yields since March 2020 but as the day wore on, the German health minister denied nationwide lockdown and that sparked a brief respite but it was Fed Vice-Chair Clarida that sent yields higher again. The 2Y Yield ended the day unchanged…

Source: Bloomberg

And Clarida’s comments erased all the earlier dovishness from STIRs…

Source: Bloomberg

The 30Y yield did not bounce, in fact, signaling more policy-error fears with a big curve flattening…

Source: Bloomberg

Erasing all the curve steepening from early in the week…

Source: Bloomberg

The dollar rallied for a 4th straight week, closing at its highest since September 2020…

Source: Bloomberg

Thanks to a decent bounce back today, this week’s crypto carnage doesn’t look quite as bad. BTC and ETH ended the week down around 9%…

Source: Bloomberg

Bitcoin broke below $60k but managed to bounce back above $58k today…

Source: Bloomberg

Ethereum bounced up to $4300 off the $4000 support…

Source: Bloomberg

 

Dollar strength, and recovery fears, sent commodities lower on the week…

Source: Bloomberg

WTI traded down near a $74 handle intraday – its lowest in 6 weeks…

Rounding top-like pattern this week in the yellow metal, but gold is holding well above $1800 still…

Finally, some potential good news for the average American. As gas-prices-at-the-pump always lag the supply chain from crude to wholesale to retail, the recent tumble in WTI and RBOB suggest gas prices are set to tumble in the next few weeks…

Source: Bloomberg

We wonder if Biden will take a victory lap?