print-icon
print-icon

Powell Sparks Taper Tantrum, Bonds Scream Policy Error

Tyler Durden's Photo
by Tyler Durden
Tuesday, Nov 30, 2021 - 09:01 PM

The Powell-Put imploded today as The Fed Chair curb-stomped the 't'-word (transitory) and warned that "it is appropriate in my view to consider wrapping up the taper of our asset purchases, which we actually announced at the November meeting, perhaps a few months sooner. I expect we will discuss that at our upcoming meeting."

TL;DR...

However, equity investors got a double dose of potential tightening, in terms of monetary policy (Powell taper tantrum) and bank regulation (Liz Warren's best buddy potentially in charge), on top of Omicron anxiety...

Between the tightening talk and Omicron anxiety, The Dow and Small Caps ended the month deep red, the rest of the majors unchanged, and Nasdaq eked out modest gains...

Or put another way...

This is what it sounds like when doves die (and bears win)...

Tech outperformed in November while Energy and Financials were clubbed like a baby seal...

AAPL was the safe-haven today, dramatically decoupling from everything else...

Recovery stocks staged a modest comeback today as the worst fears of Omicron faded...

In fact, between the massive wave of COVID cases in Europe and the emergence of Omicron, November was the worst month for 'recovery' stocks relative to 'stay at home' stocks since March 2020's collapse...

Powell's comments today sent yields flying with the short-end screaming higher and long-end tumbling...

The massive yield curve flattening is shouting the market's view that The Fed is on a path to a policy error...

5s30s are at their flattest since the COVID crash...

On the month, only the 2Y is higher in yield with the 30Y puking 15bps to its lowest level of the year...

Rate-hike expectations ripped higher on Powell's comments...

The dollar was chaotic today, sliding on Omicron fears, exploding higher on Powell's comments, then fading back into the red...

November was a big month for the dollar but this week's weakness came at a very key technical level...

Turkish lira down 40% in the past 3 weeks. the start of hyperinflation

Brent Crude suffered its worst month since start of pandemic...

WTI crashed into a bear market (down 22% from Oct 26th high) with the biggest 5-day drop since its negative price collapse...

Which has sent Oil 'VIX' to its highest since Lehman (excluding the COVID collapse)...


ETH (+9%) dramatically outperformed BTC (-6%)  in November (so much for the post-Bitcoin-ETF surge)...

...pushing ETH to its strongest relative to BTC since 2018

The dollar strength in November did nothing to help commodities which aside from the carnage in crude, saw PMs and copper all in the red...

Finally, on top of all that chaos, a Hindenburg Omen has struck...

And it did not end well last time!

0