Stocks, Bonds Manage Modest Gains Despite Global Currency Carnage

The Turkish Lira today...

Chinese stocks had an ugly start to the week...


 

European stocks were not much better (not helped by the collapse in German factory orders)

 

And while US equity futures were down in the pre-market, the cash open prompted the ubiquitous buying panic...

 

Trannies, Small Caps, and Nasdaq outperformed on the day...

 

As yet another short squeeze was engineered...

 

But as we noted earlier, breadth in the rally has collapsed...

 

FANG stocks mounted valiant rebound today thanks in large part to Facebook's 4% pop...

 

VIX closed at lowest since Jan 26th...

 

Despite Jamie Dimon's fearmongering over 5% rates, yields actually fell on the day

 

10Y Yields fell to near 3-week lows...

 

The biggest action today was in the FX markets however.

The dollar ended the day higher...

 

Emerging Market FX dropped to 3-week lows... while the Turkish Lira dominated, the Rand, Ruble, and Colombian Peso, and Brazilian Real were all hit today...

 

The Loonie slammed lower overnight on the Saudi sun headlines (but rebounded after US equity markets opened)...

 

However, The Turkish Lira was clubbed like a baby seal as a central bank dollar liquidity boost utterly failed sending Erdogan's currency crashing to new record lows...NOTE - today was a 22 big figure crash (biggest absolute drop ever)!! The 2nd worst percentage change day for the Lira since Lehman.

 

Cable slumped back below 1.30 - to 11-month lows - after hard brexit headlines hit...

 

And finally, offshore Yuan manage to unwind most of the kneejerk gains from Friday's PBOC forward market intervention...

 

Cryptos are off to a weak start to the week...

 

WTI managed to hold on to gains ahead of the Iranian sanctions but copper led the commodity slide with PMs weaker again...

 

Copper diverging lower from gold signals another leg lower in Treasury yields...

 

Which could be a problem for the record shorts...

 

And finally, as disappointing as the economic data becomes, high-flying tech stocks remain impervious...

Bonus Chart: Considering Jan 22nd 2018 as the start of Trump's fight with China (when he imposed safeguard tariffs on solar panels and washing machines), the following chart makes it pretty clear who is winning the trade war...

Comments

D.r. Funk Mon, 08/06/2018 - 16:03 Permalink

I READ RECENTLY THAT THE "PLUG" "WILL" "BE" "PULLED" "SOON" ON THIS
"ENGINEERED" "MARKET" "BUBBLE". Yeah mustve read it somewhere. Had no idea. See my finger.

Fantasy Free E… Mon, 08/06/2018 - 16:03 Permalink

The script on these trading days is getting pretty routine. Fake weakness early to draw in short and then squeeze into the close. Work one index one day, hold it steady then ratchet another index the next  The ballooning deficit and ensuing corporate feeding frenzy surely will bring in more funds for buyback. When that runs out it will take a new source. Meanwhile the economy rots from the bottom up. Just be ready to provide a bailout when it finally breaks.
http://quillian.net/blog/the-imaginary-incentive-to-serve-3/
 

D.r. Funk Fantasy Free E… Mon, 08/06/2018 - 16:13 Permalink

Yep but that was the case by 2015. Subroutine manipulation patterns were noticeable in 2014, extremely-suggestive in 2013. The mechanisms were clearly refined thru 2013-16 and was somewhat detectable in a couple stages. Just to point out the history, the general outline of the intraday script or script-ing (prescribed vs realtime) is still and remains Extremely Important to call out and point out, daily, for multiple reasons

In reply to by Fantasy Free E…

Fiat Burner Mon, 08/06/2018 - 16:10 Permalink

Nonsense all day, every day.  Nothing makes any fucking sense. Every price signal has been turned upside down by the monkeys pulling levers at the central banks.

D.r. Funk Fiat Burner Mon, 08/06/2018 - 16:17 Permalink

If the older generation were awake, and/or not greedy fuck bastards, they would be saying we don't want an overheated stock market or a progressively collosally overheated stock market. 'It happened 10 yrs ago, and we cant repeat this, and we need to be careful and have more normalized financial markets' The babyboomers. The elders. Nope. Silent.

In reply to by Fiat Burner

DavidC D.r. Funk Mon, 08/06/2018 - 16:27 Permalink

I'm rapidly heading to old fartdom, D.r. Funk, but I agree 100% with you. And I think that thinking old farts (which I would like to consider myself) know that NOTHING was solved 10 years ago and we're STILL papering over cracks. I can't get over the comments that are made about Powell who at least is trying to clear some of the crap even if only by small steps.

 

DavidC

In reply to by D.r. Funk

666D Chess Mon, 08/06/2018 - 16:10 Permalink

I would say that this bullshit could continue for another year or so with the help of the orange swine's tweets but I remember that in February the Dow Jones fell 666 points. That was a clear warning by the Luciferian elite, something might happen in the fall, we will see. 

Pindown Mon, 08/06/2018 - 17:30 Permalink

If Jamie Dimon America´s favourite son of law looks so friendly with his true (are they blue?) eyes, you can bet J. P. Morgan is positioned for the next cash out. The stock markets are poised to crash. That´s for sure. Some people drive some things up, to make huge profits when the crash unfolds. It´s a hard rain ...

explainstuff Mon, 08/06/2018 - 18:29 Permalink

I bought a lot of weekly VXX calls this morning considering that dow was initially down but Vix wasn't still going lower. Miraculously and Ominously for me DOW turned positive and my calls are now lower than half of what I paid for 30.5 expiring this Friday. 

 

Could someone help me here with some guidance please? Why the heck are we even up today with no good news at all :'(

khakuda Mon, 08/06/2018 - 19:44 Permalink

Dimon is right.  With almost 3% growth and 3% CPI, the 10 year could even be 6% right now and not be crazy.  A 6% 10 year would yield you 4% after tax, enough to cover inflation and leave a small real return, unless inflation accelerates in which case you are screwed.

Crazy is that the 10 year is under 3% today.

SheHunter Tue, 08/07/2018 - 01:16 Permalink

Never thought I'd say it but its gotten too crazy to trade.

Thnx ZH continuing to post these updates.  Tucked between your ever-increasing BS world ending posts.