Stocks Suffer Worst Start To A Year Since The Dot-Com Crash

Stocks Suffer Worst Start To A Year Since The Dot-Com Crash

The re-awakening of “Blue Wave” risk…

Source: Bloomberg

…along with escalating pandemic-related lockdowns/restrictions (worse than expected vaccination roll-out and hospitalization panic-mongering like we saw in 2018 due to the flu) sparked the worst start to a year for the S&P since 2001

The entire market was hit with a selling wave at the cash open after some hopeful buying overnight. NOTE, the markets all moved together largely…

All sectors were lower led by Utilities (oddly) and Energy stocks led (lost the least)…

Source: Bloomberg

But, don’t panic… as the Robinhood’rs will be back tomorrow…

As @dougboneparth noted, summing up the markets perfectly:

“After watching a teenager on TikTok call their $600 stimulus check a ‘stimmy’ and recommend three stocks that will turn it into $13,000, I’ve decided to go deaf and blind.”

VIX surged higher today…

… with the short-end now inverted as expectations around tomorrow’s GA Runoff vote leave traders looking to hedge uncertainty…

Source: Bloomberg

Treasury yields were wildly unchanged today…

Source: Bloomberg

But real yields collapsed to record lows (suggesting support for higher gold)…

Source: Bloomberg

As Breakevens surged (10Y above 2%)…

Source: Bloomberg

The dollar managed to scramble modestly higher today, bouncing off the 2018 lows critical support…

Source: Bloomberg

While the dollar ended flat, it was the Chinese Yuan that made headlines overnight, surging to its strongest against the dollar since June 2018 and at a critical level that has prompted volatility-inducing devaluations in the past…

Source: Bloomberg

Cryptos are up huge since the pre-new-year close – even with the overnight crash – with Ethereum leading…

Source: Bloomberg

With Bitcoin surging back from a $27k handle to back above $31k…

Source: Bloomberg

Source: Bloomberg

And Ethereum holding above $1000 after crashing back below $900 overnight…

Source: Bloomberg

ETH’s recent surge has erased all of BTC’s relative outperformance since Thanksgiving…

Source: Bloomberg

As Morgan Stanley noted, with The Fed clearly depressing yields, Bitcoin is the only remaining true indicator of future inflation… and in fact, the move in Bitcoin suggests markets are starting to think this adjustment may not be so gradual or orderly.

Gold also surged higher today, back above $1900 to its highest since the vaccine-headline collapse day in November (this is the biggest daily gains for gold since the election/Fed in November)…

Oil took out Mid0-December high stops overnight then was pummeled lower amid Russia/OPEC+ comments…

Finally, with gold up and oil down, the signal was not a good one for global growth/recovery…

Source: Bloomberg

We give the last word to Carl Icahn:

“In my day I’ve seen a lot of wild rallies with a lot of mispriced stocks, but there is one thing they all have in common. Eventually they hit a wall and go into a major painful correction. Nobody can predict when it will happen, but when that does happen, look out below,” ominously adding that “another thing they have in common is it’s always said, it’s different this time. But it never turns out to be the truth.

Tyler Durden
Mon, 01/04/2021 – 16:00

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