Stocks, Bonds, Crypto, & Copper Soar As Confidence Crashes Near Decade-Lows
This week was a tale of two halves. Stonks chopped lower into Wednesday morning, bounced off an opening dump then accelerated (despite The Fed Minutes signaled considerably more hawkish taper and rate-trajectory expectations). Nasdaq was the week's biggest gainer (thanks to Small Caps puke today) and The Dow underperformed but only modestly...
That was the S&P's best week since July.
Major reversal in Small Caps today however from the cash open, as the rest of the majors rallied divergently...
This week's panic-buying has reduced the drawdown from record highs (for the S&P) to just 1.5%...
Source: Bloomberg
After Monday's dump, every day this week has opened with a panicky short-squeeze to ignite momentum...
Source: Bloomberg
But as today's OpEx struck early, the short-squeezers ran out of ammo...
Source: Bloomberg
Both Defensives and Cyclicals were bid this week but the latter outperformed today to win the week...
Source: Bloomberg
Sectors were all higher on the week but Utes lagged and Materials led the gains. Financials were towards the lower end of the overall performance...
Source: Bloomberg
In bank-land, earnings have sparked a notable divergence with MS leading and JPM lagging (after a buying panic renewed in WFC today)...
Source: Bloomberg
VIX was clubbed like a baby seal this week, hitting a 15 handle briefly today...Tough to see much downside for vol from here (especially given the typical post-opex bounce)
Bonds were very mixed this week with the short-end dumped and long-end well bid (2Y +8bps, 30Y -12bps)...
Source: Bloomberg
2Y yields pushed up to their highest since March 2020 and 5Y at its highest since Feb 2020...
Source: Bloomberg
The yield curve flattened dramatically this week (the biggest curve flattening week since June) with the 5s30s spread at its lowest since May 2020 as traders signaled expectations for a Fed policy error...
Source: Bloomberg
The very-short-end of the curve repriced dramatically this week - in a hawkish manner - with a full rate-hike now priced in for September 2022 (with expectations that The Fed's taper will start in Dec and end in July 2022)...
Source: Bloomberg
And on a side note, the 'kink' is back and building in the T-Bill curve as the odds of a clean debt-ceiling extension in December slide...
The dollar fell for the 3rd straight day today and suffered the broke a 5-week winning streak. The dollar has traded in a tight range for the last 3 weeks though...
Source: Bloomberg
Crypto soared higher, rising for 3rd straight week, led by Bitcoin...
Source: Bloomberg
With Bitcoin back above $60k for the first time since April (and in fact reached almost $62k today)...
Source: Bloomberg
Commodities all made gains this week (CRB all comms hit an all-time record high) but copper was the dramatic outperformed while gold lagged...
Source: Bloomberg
WTI rallied for an 8th straight week, its longest winning streak since May 2015, topping $82 for the first time since Oct 2014...
Source: Bloomberg
Copper soared this week (its best week since Nov 2016 and 2nd best week since Oct 2011), back near the May highs, as global inventories plunge...
Source: Bloomberg
Gold tagged $1800 but was unable to hold it...
Finally, you have to laugh really that stocks are surging back towards record highs on a day when consumer sentiment printed at its 2nd lowest level in a decade...
Source: Bloomberg
"Probably nothing..."
Still this chart makes us wonder if a redux is in the cards?
Source: Bloomberg
