China Rescue Fails To Save EU, US Markets - Banks, Builders, & Bud Stocks Battered

What did China do...

Of course, everyone is talking about Chinese stocks - CHINEXT is up 10% in two days... if you fall for this manipulated idiocy, you deserve all you get. This was the biggest 2-day jump since the rescue of Chinese stocks after August 2015's devaluation crashed stocks...

 

European stocks opened with some China hope and some Italy hope but that evaporated rapidly...

 

Spanish stocks actually underperformed close-to-close but Italy's was the biggest dump from the opening highs of the day...

 

China's overnight manipulation sparked a panic bid in US stocks all the way into the cash open, and then the selling resumed...

But the S&P is now down 11 of the last 13 days with The Dow and S&P the biggest losers on the day...only Nasdaq managed to hold gains...

 

Small Caps tumbled (heading towards their worst month since Sept 2011) and have erased 2018 YTD gains...

 

Financials were the day's biggest losers, tech outperformed...

 

Despite tech gains, NFLX continued to slide...

 

The VIX term structure remains inverted for the 11th day in a row...


 

The bloodbath in homebuilders continues...

 

Pot stocks continued to plunge since Canada's legalization last week into a bear market - down 22%... this is the worst 5-session drop since inception...

And some of the individual names are collapsing...

 

Global Systemically Important Bank Stocks are collapsing...down 27% from its highs... weakest since Dec 2016 erasing almost all of the post-Trump gains...

And if you thought banks were bad, don't look at the asset managers...

 

Stocks and Bonds remain notably decoupled as selling remains the trend in both...

 

Treasury yields went nowhere today despite the panic bid and scramble to sell in stocks today...

 

10Y yields traded an inside day (lower high yield than Friday and higher low yield than Friday)...

 

The Dollar Index rebounded back up to 96, ripping higher after China closed...

 

Offshore Yuan tumbled after China's stock markets closed - despite a notably stronger Yuan Fix...

 

And among all the markets, cable was the worst performing currency as hard brexit fears re-loom and despite dollar gains, the Rand, Ruble, and Real all gained...

 

Cryptocurrencies were largely fading lower for the last 24 hours...

 

Copper managed to barely hold on to the China ramp gains but PMs and Crude leaked lower on dollar strength...

 

Financial Conditions continue to tighten and suggest notable downside for stocks...

But there is one thing holding the indices up...as Bloomberg details, price reactions during earnings season so far are pretty evenly spread out by sector so far, but the one outlier is the newly revamped Communication Services. See the green dot on the far right of the matrix below to see the how stark the difference is versus all other groups.

It’s an extremely small sample size of only three reports so far (Netflix, Omnicom, Interpublic Group), but the aggregate surprise of ~17% and positive price movement of >7% is off the charts compared to the rest. It may be nothing. Just something to think about with some of the heavier-weighted members set to report this week, from Alphabet, Charter and Comcast to AT&T and Verizon.

Or to put it another way - as goes 'Communications Services', so goes 'Murica.