'Hawkish' Fed Fail? Yield Curve Flattens Most Since 2016 As Dollar Spikes

Tyler Durden's picture

More dismal housing data, a VIX 9 handle, and bank stocks ripping higher (despite a big flattening in the yield curve) - just another day in Fed-land...

 

Stocks and the long bond unchanged post-Fed, Gold down and dollar up...

 

S&P and Dow ended the day just higher at record highs!!! thanks to post-fed dip-buying panic as Trannies surged...

 

VIX was 'handled' back down to a 9 handle (first 9-handle close since July)... of course...look at the panic-bid in stocks as VIX was crushed in the last few minutes (to get S&P green)

 

AAPL was notably hit, now down 5% from when the iPhone 8 was unveiled...

As WSJ notes, Apple acknowledged problems with cellular connectivity in its newest smartwatch, raising questions about the device’s most significant feature days before it goes on sale in stores in the U.S. and other countries. In a statement Wednesday, Apple said the problem connecting to cellular networks occurs when the Apple Watch Series 3—the first watch from Apple to feature an LTE chip for cellular service—joins “unauthenticated Wi-Fi wireless networks without connectivity.” Apple said it is “investigating a fix for a future software release.”

Financials kneejerked higher today again but retailers snd Utes were weak...

 

5Y Yields spiked most on the day (+5bps) but 2Y was the headline grabber, moving to its highest since Dec 2008 (but notably still below The Fed's 1.50% expectation for Dec...

 

The long-end of the curve rallied on the day as the short-end snapped higher (in yield), crushing the yield curve...

 

but Bank stocks didn't care about details like that...

This is the biggest flattening of the yield curve since Dec 2016.

5Y Yields are back at the same level as when the JUly FOMC meeting hit..

 

and 30Y Yields ended the day lower...

 

Another signal of Fed Fail is the fact that breakevens plunged today...

 

The market still sees a 37% chance that The Fed won't hike In December...

The Dollar Index spiked on The Fed's 'hawkish' statement, jumping by the most since January... (NOTE - this merely moved the dollar index back to payrolls levels)...

 

Despite the dollar gains, WTI prices held on to gains on the day after DOE data with RBOB fading...

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praps's picture

 

Fed balance sheet reductions are irrelevant when BOJ, ECB, BOE are still printing enough to keep all the world’s assets rising.

SILVERGEDDON's picture

All of the dog fuckery in the world will not stop the Goldman Sachs Government from fleecing all of the muppets prior to the Good Ole USA Store close out sale. 

Bulgars's picture

"Hawkish' Fed Fail? Yiled Curve Flattens Most Since 2016 As Dollar Skipes"

Who is writing those artciles??? If the curve is flattening at this point of the economic recovery, the yield is suppose to flatten when the Fed is Hawkish.

eclectic syncretist's picture

YELLEN SAYS: "WE'RE DUMPING THIS TOXIC WASTE SHIT ON THE AMERICAN TAXPAYERS WHILE THE GETTING IS GOOD, SO OUR BANKSTERS MASTERS CAN FLY THEIR PRIVATE JETS AROUND GOING NOWHERE IN ORDER TO TRY AND FEEL GOOD ABOUT THEIR FAILED LIVES".

YELLEN SAYS: "DON'T WORRY,...OUR PRINTERS STILL WORK, AND EVEN IF THEY DIDN'T WE CAN ALWAYS JUST PUNCH A FEW BUTTONS ON THE COMPUTER, TELL EVERYONE THE ECONOMY (BY WHICH WE REALLY MEAN MONEY SUPPLY, WHICH IS SOMETHING TOTALLY DIFFERENT, BUT THAT LIE IS ANOTHER STORY WE DON'T DISCUSS PUBLICLY) IS EXPANDING, AND AS LONG AS I PUNCH THE BUTTONS TO KEEP EXPANDING THE NATIONAL DEBT, WHO REALLY GIVES A FUCK ABOUT THE FUTURE. AFTER ALL, ME AND MY BANKSTER MASTERS WILL ALWAYS GET TO LEAVE THE BIGGEST CARBON FOOTPRINTS, WHILE THE "PEOPLE" ARE GETTING FUCKED BY US NIGHTLY AND DAILY".

aurum4040's picture

Tyler's - " Rate hikes are needed to aid the economic expansion" is code for we need alot more debt to keep the pig afloat, de-dollarization is accelerating, BRICS wont accept debt terms at current rates, they must go higher in order for US to finance the 'expansion'....Could it be? Maybe. Or maybe it's code for the markets to keep buying or at least keep market at bay while Fed attempts the unthinkable balance sheet unwind. 

Golden Breakout's picture

I wish someone or something would end this shit already. I'm tired of living in the fucking matrix.

Implied Violins's picture

Nope. Even dying won't do it. Someone needs to end the program.

Clock Crasher's picture

Not before squeezing shorts well above Nasdaq 6,000

This might take a few more months

D.r. Funk's picture

I would still contend, they can't get much more

It took -.50 vix with a low 10 starting pt to lift the 30 final-10-minutes dow. That is hilarious. That is a lot of force. It came back a tiny bit on them. They are at outer limits again and it's at least fairly doubtful they can obtain a copacetic algo regime under 9

Clock Crasher's picture

Check this out from Mac10 at PonziWorld

Chart png image

https://3.bp.blogspot.com/-VXqh7sIF0Uw/Wah7h-Wd4bI/AAAAAAABVxA/LiRer5jRX...

Mac if you're reading this please update this chart

Clock Crasher's picture

I'm very slowly getting more bearish. 

I hope to revert back to mega doom bear from hell lvl 11 soon. 

The blow off top has either occured and is in the exhaustion phase or we need to gap and run to Dow 23,000 for good measure.  Who knows.  My shorts are long dead and buried.  Only thing that can make me rich now is a precious metals mining face ripping bull market for the ages.

I looked up OCC data last night

242 Trillion in US bank derivatives

132 Trillion worth of Interest Rate derivaties

99 Trillion of those 132 Trillion Interest Rate derivatives are "swaps"

I'm not sure how to interpret that data point and what if anything it could mean for an equities meltdown

There was a handful of Trillions (2 or 3) in subprime credit derivaties

NDXTrader's picture

Mother of all blow off tops yet to come

buzzsaw99's picture

...there is no spoon.  /spoon boy

GodSpeed_00's picture

Whatever your situation is, it could be worse.

Golden Breakout's picture

Thank you. I appreciate the comment.

D.r. Funk's picture

Yeah but the game of chicken vs the deepstate is what they're waiting for. It's been endgame in a few stages for about 15 mos. now

wisehiney's picture

TLT baby!

It's like taking candy from a retarded baby.

NDXTrader's picture

Anyone in the world actually think they would let the market go down on a day they make a major policy announcement? I mean the Fed doesn't trade stocks (sarcasm) but that just never happens here, in Europe or Japan coincidentally

Squid Viscous's picture

exactly, the down move at 2:20 was a gift,

can't have mkt. red on a fed meeting, rushahoma eve.

and tomorrow will be like watching paint dry,  heard that somewhere else today...

D.r. Funk's picture

Good to know they are fooling VERY FEW people here

It's obvious it's a ruse AND/OR scripted AND/OR governed

Clock Crasher's picture

Noise!  When do we get back to multi day -10% flash crashes?

serotonindumptruck's picture

Major false flag coming any day now.

WWIII is imminent.

Traderone's picture

You need to come out of your basement more often and get some fresh air. 

Implied Violins's picture

I did. And I came to the same conclusion.

serotonindumptruck's picture

I'm outside every day, dicksmack.

Did you have a point to make or were you just going to dribble disgusting globs of shit all over the forum?

Traderone's picture

We'll speak again when your false flag bullshit and WWIII begins, I.e. never. Back to mommies basement now sonny .

serotonindumptruck's picture

Perhaps I can eat alphabet soup for a week and shit out a more coherent response than what you just wrote?

Implied Violins's picture

Hire some monkeys to fling it against the wall first. Maybe there'll be some Shakespeare in there.

D.r. Funk's picture

Na, reasonable, the n.k. timeline is very much "known" to be progressing (and predicted to be "different this time" several months ago. by some of us)

lester1's picture

Who's going to buy the billions in US Treasuries the Fed is about to dump on the market ???

 

Won't yields have to go up in order to find buyers?

lester1's picture

Why would they buy if we are going after their all N Korea?

ThirteenthFloor's picture

Not has much as before. They use them as collateral for the Silk Road project and buy US Real Estate, hard assets. Some states such as CA and NY have > 50% of assets (land, structures, businesses) owned by foreign entities.

cheech_wizard's picture

I seem to recall we sucker-punched the Japanese that way once.

If there is one thing I have come to learn in life is that history repeats.

NDXTrader's picture

Don't worry, they will find a mysterious buyer out of Luxembourg with a Trillion sitting around

Peacefulwarrior's picture

Not at 10 billion every quarter. In the scope of distortion we now reside that is chump change.

yogibear's picture

The BOJ, BOE or ECB buys them. Off balance sheet debt.

Clock Crasher's picture

Primary dealers.  They will use their excess reserves.  Then they will trade them to pension funds for a profit.  Then park the proceeds back into excess reserve accounts and collect. 

 

Peacefulwarrior's picture

Admittedly, Information is transferred to the Apple watch via Microwave transmission. Has anyone cared to study what the effect of an Apple watch  device connected to a body all day, is doing?

NDXTrader's picture

We know it fries your balls in your pocket

cheech_wizard's picture

Soon to be Amazon glass...

https://www.reuters.com/article/us-amazon-glasses/amazon-working-on-smar...

Standard Disclaimer: Life moves pretty fast. If you don't stop and look around once in a while, you could miss it.

BSHJ's picture

I think that is why men quit wearing socks with dress shoes......and pants now have 'skinny legs'

J bones's picture

Coworkers think this market is normal and keep bragging about their retirement mutual funds. They think its just going to go on and on.

They will be the ones squashed right when this thing heads south cause when it goes its going fast and hard.

Clock Crasher's picture

Gated.  Services Unavailable.  Unable to process your request.  Access Denied.  Limit down.  Haulted. 

I can see the future. 

Squid Viscous's picture

por espanol, marca numero dos...

otherwise please stay on the line...

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