Big-Tech, Bonds, Bullion, & The Buck All Bid As Taper Tanks Real-Yields

Big-Tech, Bonds, Bullion, & The Buck All Bid As Taper Tanks Real-Yields

After yesterday’s panic-bid sending all US major stock indices to new record high closes, ironically on the day The Fed unveils the taper, today was much more mixed with Nasdaq accelerating its meltup as The Dow and Small Caps ended lower (despite a late-day buying-panic and the S&P managed modest gains…

Nasdaq up for the 9th straight day – the longest winning streak since Dec. – and the last time the Nasdaq was this overbought did not end well…

Source: Bloomberg

Bonds and the dollar decoupled from stocks today after moving in sync yesterday after the taper news…

Source: Bloomberg

Leaving many asking “where’s my money?”…

The immediate squeeze yesterday after the FOMC statement was followed up by an even bigger one at the open this morning, but as Goldman noted earlier, that short-cover faded fast as the day wore on…

Source: Bloomberg

VIX surged back above 16 (from a 14 handle), reversing yesterday’s post-Taper compression, as perhaps anxiety over tomorrow’s payrolls print leaked into traders’ minds…

As Goldman notes, tomorrow’s Payrolls numbers become even more significant, as it is the first full month of hiring following the expiration of federal enhanced unemployment benefits, while public health has simultaneously improved and labor demand has remained strong.

UK bond yields crashed today after BoE shocked the market and did not hike rates…

Source: Bloomberg

Cable also tumbled on the news…

Source: Bloomberg

The dollar surged back above yesterday’s highs today, erasing post-Taper losses, helped by the crash in cable…

Source: Bloomberg

And as the dollar rallied, crypto was sold. Bitcoin tested back to $61k…

Source: Bloomberg

And Ethereum back below $4500…

Source: Bloomberg

Treasury yields plunged today, erasing all of yesterday’s taper tantrum. The buying started as Europe opened and accelerated as US cash equity markets opened. The belly outperformed the wings today (2Y and 30Y -6bps, 5Y-10Y -9bps)…

Source: Bloomberg

30Y Yields tumbled back below 2.00%, erasing yesterday’s post-Taper surge…

Source: Bloomberg

US rate-hike expectations dropped and pushed back the 2nd rate-hike from Dec into Jan 2023 (although the moves were anything but monumental)…

Source: Bloomberg

The 20s30s yield curve steepened back out of inversion today but struggled to hold above zero…

Source: Bloomberg

Real yields plunged back near record (negative) lows…

Source: Bloomberg

The drop in real yields sparked pressure on the Small Caps/Nasdaq pair (value/growth)…

Source: Bloomberg

And this drop in real yields was supportive for gold…

Source: Bloomberg

Gold retraced all of the post-FOMC losses and then some, spiking up to $1800 intraday before fading back a little…

Total chaos in oil-land today as OPEC+ held output steady (despite earlier rumors of Biden-pressured increases, which were entirely rebuffed). Also some trader chatter about index rolls impacting futures. WTI surged to over $83 before tumbling back to a $78 handle…

Finally, a reminder that in 7 of the last 8 months (since Vaccines were widespread and the economy began to open), Stocks have rallied in the hour following the Payrolls print… no matter whether it was a miss or a beat!

Source: Bloomberg

But… the last two months have seen stocks close lower on payrolls day (after 6 straight months of gains on that day)…

Source: Bloomberg

Is good news tomorrow good or bad for stonks? Trade accordingly.

Tyler Durden
Thu, 11/04/2021 – 16:01

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