Yield Curve & Credit Markets Are Flashing Red As Small Caps Slump On Tax Turmoil

Tyler Durden's picture

Overheard in Washington today...

 

Equities slipped, the dollar gained and the Treasury yield curve flattened further as markets reacted to the suggestion that Senate tax writers will release a bill Thursday, according to Senate Finance Chairman Orrin Hatch.

Stock indexes across the Gulf were among the world’s worst performers, with Saudi Arabia’s Tadawul All Share Index falling the most in a year before paring losses.

 

Since the Saudi shenanigans, bonds and bullion are outperforming...

 

Trannies and Small Caps are notably weak as Dow, S&P, and Nasdaq cling to unch on the week... (Small Caps worst day in 3 months)

 

The Dow was desperately pumped back to green by the close... another new record high...

 

It was also a very weak breadth day...

 

Blue Apron was very red...

 

And Red Robin shareholders were blue...

 

Tax reform hopes faded notably today...

 

We also wanted to noted this chart - have you ever seen a chart so placidly plodding higher without a heart beat?

 

High yield credit markets continue to signal trouble...

 

And as the cost of protecting credit has recently surged, so the cost of protecting stocks has decoupled from the underlying...

 

Equity vol has ben languishing for months but the last wek or so has seen FX and Rates volatility collapse... (FX Vol now at 3 year lows and Rate vol at record lows)

 

High yield bond prices (HYG) are the furthest below the 200DMA since the election...

 

Treasury yields were mixed with the long-end lower in yield and short-end unch...

 

With the yield curve crashing through 80bps - flattest since Nov 2007... This is the 8th day in a row of flattening - the longest streak in two years! Who's to blame?

 

Elsewhere in the world, Venezuela is bloodbathing...

 

The Dollar Index rebounding from yesterday's tumble but rolled over into the end of the US session back into red on the week...

 

Bitcoin slid again today, but held above $7000...

 

WTI fell vey modestly clinging to post-Saudi gains...

 

Gold was slightly lower today but continues the chaotic trading patterns around the US equity open...

 

But crude remains the week's commodity winner while copper is lagging...

 

And finally, there's this... worst day for small caps in 3 months today...

 

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jamesmmu's picture
Yield Spreads Flash Warning, Life Savings At Risk, An Economic Downturn Is Underway… Stock Market Levels And Wealth Inequality Levels Similar To The Conditions That Created The Great Depression

http://investmentwatchblog.com/yield-spreads-flash-warning-life-savings-...

Full Court Lugenpresse's picture

LMAO at that Dow close

Squid Viscous's picture

yeah! hookers, blow and Dom for everyone! again!!

Consuelo's picture

 

 

"Fingers Freddie, Diamond Jim

They're gettin' ready

Look out! I'm comin' in!

So spin that wheel, cut that pack

And roll those loaded dice

Bring on the dancing girls

And put the champagne on ice"

Got The Wrong No's picture

Isn't it par for the course to have  a down turn this time of the year, then a Christmas rally?

glenlloyd's picture

I'm just glad to see the barfing clown again!

skipweston's picture

The CBOE chart looks like a Bernie Madoff Chart. A perfect 45 degree angle.

D.r. Funk's picture

Haha, someone else noting a "straight line"

To all the braindead morons, there is a preponderance of overly uniform shortterm and longterm charts, more than would be believed to naturally occur. Started noticing straight lines in 14, called it, because it really was fairly obvious, aligned and continued to align with a programmed environment model, and "skipw" just relayed it perfectly

earleflorida's picture

what a fucking,'misfake'!

this muted trump`et sounds?

mily's picture

High WTI price preventing shipple from spending/loading on credit? Ministry of BS statitics reporting record high oil inventory build tonight?

Keltner Channel Surf's picture

Eclectic MixTape:  Track-of-the-Day

Somebody tell me, is there a way for me to destroy my reality?
Kiss me or kill me, cause I've waited so long

The Drums founding members Jonny Pierce and Jacob Graham, even before a prior incarnation as ‘Elkland,’ were making synth-driven indie-pop, sans both the guitars and Smiths-Joy Division-Surf/Math Rock influences that would come later, under the short-lived name 'Goat Explosion.'

Though that sounds quite messy, this particular track is rather tight, and punchy and infectious as influenza-A, taking nods from New Order (if first administered a case of 5-hour ENERGY), 90s dance club sensibilities and even a bit of late-80s MTV.  If better known, one suspects this might have wide appeal, both to synth- and indie-pop mavens.

Unfortunately, it doesn't appear any GE tracks are available for purchase, but thanks to diligent You-Tubers, this one, at least for now, has been preserved.

(Brooklyn, NY - 2004)   https://www.youtube.com/watch?v=XcRjt5qqTx0

jamesmmu's picture

I couldnt resist, I dip into my saving to add more short position 3 mins before closing.

Wish me luck!

D.r. Funk's picture

2am Nikkei Futures: +400. Since the start of september, (literally 9/11 could be considered the start of the ramp), there is a program on nikkei. The prior 4 months were entirely homogenously flat. Fakest fuckin environment ever, how the citizenry doesn't realize.

Didn't carryover however. Subroutines at 11 and 12pm. along with 330. Maintained the bullshit. 'Night fed, You know room is running out, You know the time is running out, SEE MY FINGER

==

SUB 11 VIX STREAK will die, after this round, once and for all

==

1% 3% DRAWDOWN LAPSE closer to ending, they know it

==

ADDITIONAL FORGED LEG closer to ending, they know it

==

RELENTLESS SPATE OF ' CONSECUTIVE ' ATH-CLOSES can't go 'forever'

Shiller pe 31.62 (2nd place) 4.5% over 1929

87% above mean 96% above media

nsurf9's picture

Sometimes in snow, no matter how much you push the gas peddle thru the floorboard - we only become more stuck (if, the engine doesn't explode) with your quantative gunning of the gas peddle - you Federal Rothschild Reserve currency destroying/stealing bastards!

Blankfuck's picture

The FED RESERVE FUCKERS ARE HERE TO PLEASE, NO WORRY TO THE BANKER FUCKERS AND ELITE FRIENDS. please calm down!