Stocks Panic-Bid, Bonds Dumped After WHO Doublespeak Over "Global Pandemic"

Deaths surge, Cases spike, Human-to-human transmission in US, WHO says "global pandemic", and the death count is rising faster than SARS...

and the machines desperately keep trying to ignite momentum. in the immortal words of one veteran trader looking on as the so-called market exploded back to unchanged after WHO did what everyone had feared and declared this a GLOBAL PANDEMIC: "this entire market is a f**king joke!"

  • 0640ET *WHO: PERSON-TO-PERSON VIRUS SPREAD IN JAPAN, VIETNAM, GERMANY

  • 1240ET *CDC CONFIRMS FIRST PERSON-TO-PERSON U.S. CORONAVIRUS INFECTION

  • 1440ET *CORONAVIRUS IS INTERNATIONAL HEALTH EMERGENCY: WORLD HEALTH ORG

So panic-buy?

The message from the rest of the world...

China continue to be closed, but A50 futures tumbled back to recent lows today - lowest close since June...

Source: Bloomberg

European stocks all slumped today...

Source: Bloomberg

The Dow, S&P, and Nasdaq all managed to surge into positive territory - after the worst possible set of news headlines...

Well engineered short squeeze to keep The Dow green in 2020...

Source: Bloomberg

For some reason, cyclicals were suddenly panic-bid on the bad news...

Source: Bloomberg

Trannies and Small Caps are notably in the red year-to-date and The Dow is clinging to UNCH before the WHO Doublespeak sparked a rebound...

MUST KEEP DOW GREEN YEAR TO DATE

TSLA went full turbo overnight as someone got a huge tap on the shoulder and puked their shorts...

Source: Bloomberg

And reminded more than a few people of a certain DotCom stock...

Source: Bloomberg

Bonds and stocks are ridiculously decoupled...

Source: Bloomberg

Treasury yields extended their decline on the week before a ridiculous spike after the WHO news...

Source: Bloomberg

30Y tested down to a 1 handle... (and 10Y below 1.55%)

Source: Bloomberg

And perhaps most notably, the yield curve has re-inverted with 3m10Y now at -3bps...

Source: Bloomberg

Before we leave rates-land, we also note that the market is panic-pricing in almost 2 rate-cuts now for 2020

Source: Bloomberg

The dollar trod water for a =4th day, roundtripping overnight strength with selling in the EU/US day...

Source: Bloomberg

Yuan ended weaker but no thanks to panic-bid after WHO...

Source: Bloomberg

Cryptos continued to rise today in a very uniform manner...

Source: Bloomberg

Commodities chopped around like everything else...

Source: Bloomberg

Copper futures fell for a record 11th day in a row today...

As Bloomberg noted, copper's slump may be an indication that we’re due for a bigger pullback in the U.S stock market. The metal, which is viewed as an indicator of Chinese economic health, has fallen for 11 straight sessions. It’s now at its lowest level since September, when trade tensions with China dominated headlines and the S&P 500 slid more than 3% in three weeks.

Now, it’s the coronavirus that’s prompting concerns about the Chinese economy. With the country hitting pause on production, construction, and other economic activity, industrial demand concerns are pushing copper lower. And since American and Chinese manufacturing are highly correlated, this slowdown could translate over to U.S. equities.

Source: Bloomberg

WTI traded down to a $51 handle to a critical support level...

Source: Bloomberg

But then again - traders panic-bid oil too...

Finally, some have wondered if the surge in Bernie Sanders has also weighed on stock market sentiment...

Source: Bloomberg

And we'll let Guggenheim's Scott Minerd have the last word...

Deutsche Bank prophetically write this a month ago, reflecting on the market's ability to entirtely ignore potentially terrible news in the short-term...

"When extreme events begin to saturate the info-sphere on daily basis (sometimes even intraday), reality unfolds too fast – we no longer remember (or don’t care about) the headlines from two or three weeks ago. Our perspective and assessment of the horizon (“cognitive eyeballing”) is distorted. We are blinkered by intensity of information we have to process – overwhelmed by both its quantity and speed of its arrival – and no longer seem to be unable to properly assess the risks ahead of us, and have become insensitive to them. The distorted perspective downplays the risk of “hitting the ground”. The informational intensity transcends our capacity for statistical approximation and this rarefication of control affects the temporal regime of our decision making. As a consequence, our horizons flatten and everything that resides beyond immediate future is bundled as “long-term” -- we appear to be indifferent to its temporal distance -- it is all equally remote and equally out of grasp and we capitulate on our efforts to forecast beyond short term horizons."

It seems given the BTFD efforts in the last week in the face of increasingly scary data on the Wuhan virus, that DB nailed it. And now we are in the "longer-term" and reality is inescapable... even if we still believe The Fed can save us all from every- and any-thing.

"Fed has transformed from uninvolved player to an active convexity manager and its major supplier."