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Commodity Carnage Contagion Crushes Stocks & Bond Yields
Summing up Mainstream media today...
Where to start...
Bonds - Good!
Stocks - Bad!
Commodities - Ugly!
* * *
Everything was red in equity index land today... Trannies worst day since January
Stocks are all red for the week... Dow is down over 400 points from Monday's highs back below its 200DMA; S&P 500 cash is back below its 50DMA; and Russell 2000 broke below its 50 & 100DMA
Financials have given up their earlier week gains (as rates flatten) and only builders remain green on the week...
Leaving The Dow red for 2015...
52-Week Lows are at their highest since 2014...
On the week, the Treasury complex is seeing major flattening as the long-end collapses while short-end lifts on rate hike expectations...
With 30Y retracing all "Greece is fixed" weakness...
With 2s30s near 3 month flats...
Maybe all that NIM hope is overprices after all...
The US Dollar leaked lower on the day as EUR strengthened and cable weakened...
Summing up th edetails across the FX space (courtesy of ForexLive)
The dollar was mixed in trading today. It rose against the GBP and AUD, fell against the EUR NZD. and JPY, and was little changed vs the CAD and CHF.
The cable was the big loser on the day and is closing near low levels after weak retail sales took some of the jubilance from thoughts of a quicker tightening. BOE McCafferty did comment, however, that the BOE must be careful not to keeps rates too low for too long. EURGBP surged higher in trading today.
In Canada, stronger than expected retail sales sent the USDCAD sharply lower, but oil price continued to fall with WTI crude down 1.14% on the day at the close. What was gained in the London morning session for the loonie (and after the release of the data) was taken all back by the close.
The EURUSD rallied to new week highs (highest level since July 15th). The pair did find sellers against technical levels defined by the 50% retracement and the 100 day MA at the 1.1011 and 1.1000 respectively.
Twenty-four hours after the RBNZ cut their rate by 25 basis points, the NZDUSD is ending the day up from 5 pm close at 0.6560 but off the London session highs at 0.6694. The pair is ending the NY session testing the 200 hour MA at the 0.6606 level. Disappointment from not cutting 50 basis points sent the pair higher but lower rates are still expected between now and the end of the year.
But that did nothing to support commodities...
Copper now at 6 year lows
And front-month crude getting close to cycle lows...
* * *
Scotiabank's Guy Haselmann provides some more ominous color...
I believe the plunging of the commodity complex is telling us that the China economy could be imploding. Problems stemming from China are spreading further into more sectors and markets (various high yield sectors, emerging markets, EM and commodity currencies).
As I wrote in my note Tuesday (Too Much of Everything), Zero interest rates have contributed to over-production, pressuring consumer prices lower. Certainly, borrowing in the energy sector contributed to the over-supply of oil and look what has happened in that sector. Now, weakening demand from China is accelerating the decent in most commodities. Budgets of EM supplier-countries and commodity exporters are being materially impacted.
As commodities fall, the FOMC says that inflation targets are harder to obtain, leading to a self-perpetuating belief that continued cheap money is needed.
Yet, claims fell to the lowest level since 1973, housing is strong, and auto sales are back to almost 17mm units (etc). Clearly, the Fed has gotten itself into a difficult position. By not lifting-off and taking their medicine in 2014 – market imbalances today are now bigger and the consequences greater.
China is unfolding as the most important story of 2015 for markets. Stay alert. Long-dated US Treasuries remain attractive and good place to hid.
* * *
Charts: Bloomberg
Bonus Chart: Protection costs are dramatically diverging between credit and stocks...
As Bloomberg notes, the last time the VIX diverged from high-yield CDS this much was in August 2013, when investors were anticipating the Federal Reserve would start reducing its quantitative easing program. The equity volatility gauge jumped more than 70 percent in the next two months as the S&P 500 lost as much as 4.6 percent.
Bonus Bonus Chart: The real fear index is the most complacent since before Lehman... (details on Implied Correlation here)
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stagflation anyone?
Except the house next door is posting for $800k. My car feels ashamed.
A Chinaman would have bought it a few months ago, but I am not sure there are many Chinese buyers left now. See if it drops to $700K in a few months.
HA! Yeah, raise those rates, Yellen. LMFAO!!!
Do it !! ....there is no confidence to be lost anyway !
Nah man, they can't let the VIX get above their lucky 13.
The VIXEN awaits...
August 2000: Dow Jones was 15,500
July 2015: Dow Jones 18,100
Up 16.5% over 15 years
August 2000: Gold price 280 bucks
July 2015: Gold price 1100 bucks
Up 400% over 15 years
August 2000: Silver price 5 bucks
July 2015: Silver price 15 bucks
Up 200% over 15 years
Now we already know that over the last 8+ years there really are no free, un-manipulated markets what-so-ever in the entire fucking world unless we're talking black market shit.
We all know TPTB are creating Trillions, and upwards of over 1 to 1.5 QUADRILLION in fiat debt-based shit paper in order to just barely keep their precious "markets" from falling off the cliff for good.
Meanwhile they are also creating Billions in criminal, fake paper bullshit contracts in order to do everything that they possibly can do to supress the true value of what physical gold and silver SHOULD be in terms of whatever bullshit fiat you would want to compare gold and silver against.
We know now that they have created such a massive and out of control death spiral of debt and destruction world-wide just to continue perpetrating this criminal Ponzi scheme so that they can control everything and almost everyone on the planet.
But still...after hundreds of Trillions created and lost over and over and over again, they can still only pushing the Dow up a little over 15% since the year 2000.
Yet also, despite blasting gold and silver with more 100's of Billions, if not Trillions, of their printed up shit paper, they have been completely unable to slow an ouce of silver or an ouce of gold from skyrocketing 200% and 400%.
I dunno, bitchez...over the next 1, 5, 10, 15, or 20 years (given we live long enough on this floating rock in space), what do you think would be the wise thing to own going forward given these numbers and the current state of the world economy? Some bullshit stocks or real, tangible, and almost infinitely valuable gold and silver???
The more they do this shit the more I will also never give a fuck ever what gold and silver will supposedly be "worth" in terms of fiat. Yes, they will be "worth" 30 times more than they are supposedly "worth" right now today in 2015.
But do not fall for that bullshit, folks. What the phyzz will be worth will be other valuable large assets like a home and land in terms of gold. And like food and clothing in terms of silver.
When you can buy a couple nice acres with a decent house on it for 5 ounces of gold one of these days which you only spent about 6000 fiat dollars to obtain today, you'll be super fuckin' glad you scooped up as much phyzz today at these INSANELY low fiat valuations while there was still even any phyzz left to stack.
One of these days very soon you won't be able to find an ounce of phyzz for any fucking amount of fiat in the world.
Dude, chinaman is not the preferred nomenclature
Chinaperson? [gender neutral]
SHUT THE FUCK UP, DONNIE!!! ;-)
+100 for the reference! :)
The Dude abides...
Sell in May and go away.
take the money and go
Everything is truly awesome.
ZH posted China cashed out of treasuries so who was the counterparty? They must be loving this
Prolly U.S. Dollars.
China (and world) population is selling everything...bonds, Gold, Copper...anything of value to survive, before the coming collapse wipes out all value ?
Seems like what is going on out there...
{ but few smart survivor preppers will hold on to your physical metals, and land and protect your water and food. }
Caixin China PMI drops sharply, surprising markets
The preliminary China Caixin PMI surprised markets by dropping to a 15-month low, with analysts pinning the hit on the recent stock market crash and weak export demand.
The data, released Friday, fell to 48.2, coming in well below the 49.7 forecast from a Reuters poll and the 50-mark separating growth from contraction.
"The PMI came as a big surprise for the market, which was expecting an increase," Dariusz Kowalczyk, senior economist at Credit Agricole private bank, said. "I believe the reading reflects the negative impact of the stock market crash, the weaker outlook for consumption and the worsening of availability of funding for investment," he said, noting that initial public offerings (IPOs) were suspended in the wake of stock market turmoil.
After the data, the Australian dollar dropped as low as $0.7293 - its lowest against the greenback since May 2009, during the Global Financial Crisis - from $0.7345 before the release. China is among Australia's largest trading partners, offering a market for resources exports. The Shanghai Composite held on to gains, although they narrowed.
The data mark a sharp contrast to China's quarterly gross domestic product (GDP) data released last week, which beat forecasts by showing 7.0 percent growth, renewing long-standing concerns over data accuracy.
"Recent improvements in economic momentum may have been derailed this month by weaker foreign demand," Julian Evans-Pritchard, a China economist at Capital Economics, said in a note Friday, adding that the export orders component of the data posted the largest decline. "Today's PMI reading suggests that the improvement in momentum seen at the end of the second quarter may not have extended into the start of the third quarter and that downside risks to growth remain."
http://www.cnbc.com/2015/07/23/caixin-china-pmi-falls-to-lower-than-expe...
Mostest awesomality since Lehman.
Gradually, and then suddenly.
~ E. H.
Most Daily Unicorn Sightings Since Before Lehman?
Crude and paper gold (not to mention silver and others) inching toward really being on the ropes with potential for rapid, sharp declines . . . . but nah fuck the charts just go with Fast Money.
I guess they are going to bang the close every day now.
Just absolutely shiny and Wall St. will just strangle the goose for a few more golden eggs.....
So after the close the Dow mini future is off another 100 points. I expect the plunge protection team to get to work at 9:03amEST tommorrow.
Actually it was up 50. Now up 10 compared with 4 PM. But yes - the PPT will be in at the Open as they are every fucking day.
Well tomorrow is Friday and uncle Jack and crew will close out the day nice and green for the street.
MOAR is alway on the way!
Wouldn't want to ruin the Hamptons weekend.
I see gold continues to plummet even as the dollar weakens. Bad news for gold nuts.
Sure, but betting on gold isn't about a crash, it's about the response to it.
chosen is ZH's newest gold troll.
Welcome to the jungle shit for brains. Keep reading.
Great news for me (a gold nut). I CAN AFFORD TO BUY MORE!
Closing floor trading at the cme is like locking the cockpit door . Enjoy the ride
Doc Copper's already on the ground, preparing his chute for a further cliff dive.
Looking at the chart of Freeport-McMoRan Inc(NYSE:FCX) - down 64% in one year... looks like a glide path down to a hard landing all right. No "squeeze" in that chart, except for maybe the Oil Dead Cat Bounce in May.
See? Now its not Greece, Its Finland. Nokia, Paper as export and Russia a proplem. Other than that? Finland is good for reindeer.
and Vodka....really nice vodka
Take it down to $650 an ounce so 75% of global gold production gets mothballed and then watch the price action...
boy London and New York sure have something against PAPER Gold and Silver...
http://www.kitco.com/charts/livesilver.html
dont they!
Soon.
maybe AMZN about to announce a gold skittle shitting unicorn?
Would it ruin anyone's dinner (e.g., those with overnight posns) to report that the QQQs have already ramped back all of today's post-noon losses? OK, then, I won't mention it ... (AMZN up 80 bucks after-hours)
amzn has a profit!!!! buy buy buy. cause well we want co's with few to no employees take market share from brick and mortar stores with too many employees making shopping enjoyable and by gosh employing sally and jim and jose who live in your town. the amzn model is death to jobs and quality of life for the sheep of the world.
How quickly the pitchfork-wielding masses turn on you here :)
A glance at the noon "Dow Dumps 350" thread will reveal I was triple-leveraged SHORT the QQQs today (though I always go to cash at days' end) and, as a fulll-time trader, NEVER revel in the pain of others, as I get nailed all the time, like everyone. (Been tough since Feb for pure 100% cash day-traders like myself, with most of the moves coming overnight, with horizontal day sessions, only in the past few weeks has that changed.)
Even the machines need a day off!
first by deflation...
Tyler,
I know you have your own plan for what articles are important and what aren't.
But in my humble opinion the following results:
"05:14 PM EDT, 07/23/2015 (MT Newswires) -- Amazon reported Q2 sales of $23.18 billion, up from $19.34 billion in the year ago quarter and well ahead of the analyst consensus of $22.4 billion. Operating income was $464 million, a swing from a year ago loss of $15 million. Net income came in at $92 million, or $0.19 per share, up from a year ago loss of $126 million, or $0.27 per share."
and the resultant after-hours pop from $482.18 (at close) to approximately $564, a 17% increase, to a current quarter multiple of (.19*4/564) of approximately 764, up from a loss last year, is ludicrous.
This annoucement explained the complete Nasdaq 100 after-hours futures claw-back, as evidenced by the fact that neither AAPL and GOOG participated to the same degree in after hours trading.
If there is anybody out there who still thinks Nasdaq 100 is not living on borrowed time, please let me know.
"and the resultant after-hours pop from $482.18 (at close) to approximately $564, a 17% increase, to a current quarter multiple of (.19*4/564) of approximately 764, up from a loss last year, is ludicrous."
I'm sure the BlowHorn will look beyond this fact and tell everyone the market is fine and everything is fairly valued.
Correction, "AAPL and GOOG participated" should read "AAPL and GOOG did NOT participate". For some reason I could not edit this post, so I am editing by reply.
You can't edit once someone replies to your comment. No worries, I understood what you were saying.
Copper...must...die!
This whole short commodity trade is looking pretty one sided right now. I'm not saying the commodity selloff excluding the PM's isn't warranted, but markets tend to overshoot and then rebalance for the next leg in the trade.
All the deck chairs are lined up on the wrong side of the U.S.S. Short Squeeze, and there could be some nasty whiplash. The $usdx is looking long in the tooth on the daily charts.
Gold and silver havent looked this cheap since 2001 and 2008. And the miners are at values of $300 gold again.
Talk about a fucked up situation.
Is it shorts or lack of longs? China's economy is in crash and burn mode. They were the only driver of commodities prices the past 10 years. US, EU, and Japanese oil and industrial metals consumption peaked a decade ago and have been in decline since. The rest of the BRICS, with the exception of India, are shitting out bricks too. Where will the increased demand come from? There will be a few commodities dead cat bounces until QE4ever starts.
9/11 TRUTH GOES NUCLEAR:
Massive Download In Progress,..Russia Disseminates,
Snowden Validates,
NSA Evidence Corroborates
New 9/11 Data Dump
“This 9/11 data dump is so radioactive the US Government will likely collapse. The world will never be the same when nations everywhere see this report!”
http://www.philosophers-stone.co.uk/?p=1488
This BS link claims a nuke was detonated under the towers. Yeah right. You think they would have nuked all their fucking gold that was under there? haha!
Hey dickhead, do some real research before dismissing that possibility. Lots of thermite after the controlled demolition and the fire that burned for weeks.
This BS link claims a nuke was detonated under the towers. Yeah right. You think they would have nuked all their fucking gold that was under there? haha!
Well, I just got my ass kicked by a woman and did not see it coming. I whooped financial ass on some old males yesterday but I did not expect to meet Olga. I have no reason to lie. I am mostly antisocial so I don't mingle too much. I was invited to Olga's place once before for a family party but didn't go because I am an asshole and don't like being around people.
Olga is a come in your pants stunner. I had no idea. She is married with two kids but she is astonshing. You don't see those kinds of woman all of the time. Olga is Russian and blonde for over by VLadivostok somewhere. When our eyes first locked I was not good because what I saw was "I will have fuck you." I think she would hurt me. She is one fine peice of ass and that eye to eye look she gave me was no kidding.
I can't do it though. I gave my word to my wife. Can't do it. And that is only going to make the temptation worse because a woman that looks like that is used to getting what she wants. I can bullshit the ladies most of the time and make myself appear to be smart but not this time. I am not even sure if I put together a complete coherent sentence. I had not even smoked any medical dope yet.
I have not seen a woman like that before. She is from somewhere in the middle nowhere East Russia. speaks English extremly well, is heart stopping beatiful. I may be a country boy but she is something else that is a little bit more than I am and she knows it. I can beat her up on economics though I bet...which means I will have to talk to her again. I can't do that.
You young ZH guys need to go to Russia and visit the ladies there. Don't think they are easy women though because they aren't. Oh yeah, and they know how to fuck like you would not believe if you can get that far. You better hit her pretty hard as well because a Russian woman has sex in a different way than any other women I have been with. You either fuck her brains out or she will not be happy. That is why I am nervous.
I would rather talk to her first. I just have to know what the fuck is going on in Far East Russia. I want to know about how she grew up...OK, she has me. This has not happened in many, many years. I will be fine it is just that... She is the most beautiful woman.... she is from the Far East of rural Russia. I wonder if she wants to go shoot some guns?
https://www.google.com/maps/place/Khabarovsk,+Khabarovsk+Krai,+Russia/@48.0989207,135.1059326,6.25z/data=!4m2!3m1!1s0x5efae9bc5b77255d:0xd9dcd2723b651256
Are you a narcissistic American? This is supposed to be a financial/political website. Would you not be better with Ann Landers or Ashley Madison? Or, perhaps, a psychiatrist?
Did you do some Ludes dood? WTF
Damn it ! I'm too old to buy Gold. Or is it Gold is too old for me too buy ? Damn this can't think good no more shit. Fuck it, give me 5 of them there Buffalos sonny, I like the 4 9s, don't read 666 when I hold it wrong. 10 bucks on 00 ! Up it 10 each spin till 1000 @ 35/1 why not, stranger things have happened. PM went down during record demand and record supply deficiet, spin it sonny!