Markets In Turmoil: S&P, Dow Erase 2018 Gains As Nasdaq Crashes Most Since 2011

Not a fleshwound anymore...

 

China started off excitedly but the afternoon session saw selling pressure into the close...

 

Spain caught Italy's flu and Europe caught German banking system's cold...

 

And Deutsche Bank closed at a record low...

 

The United States' largest market cap stock index ($23.75 trillion NYSE Composite) tumbled to 13-month lows today...

 

S&P 500 Price-to-Sales has tumbled to its lowest since June 2017 - Double-top?

 

US Equity market momentum factor performance has crashed (worse than in Feb)...

 

It all started so excitedly with Boeing's beat sparking a pre-open ramp in Dow futures which lifted everything and got CNBC very excited - but that did not last...

 

But once the US equity cash markets opened - it was 'Sell Mortimer Sell'... Nasdaq was utterly destroyed... down 4.4% - the biggest drop since Aug 2011

 

Futures show the week's chaotic swings best... no rescue today...

 

On the S&P 500 2,700 was all that mattered as the 200DMA was long gone...The Dow blew back below its 200DMA...

 

Small Caps and Trannies are red YTD, Dow and the S&P plunged into the red for 2018 today... Nasdaq remains only +3.7% YTD...

How ugly:

  • Small Caps down 15% from highs

  • Dow Transports down 14.5% from highs

  • Nasdaq is now down 12.25% from the highs - enters correction

  • S&P down 9% from highs

  • Dow down 8.5% from highs

 

VIX surged today... as The Dow crashed over 600 points, VIX spiked above 26

 

With the curve becoming more inverted once again - the 13th day in a row... (note that Feb drop was 14 days in a row of inversion)

 

Yesterday's short-squeeze did not last...

 

'Chipwreck' continues with SOX at 13-mo lows - confirming that double top... (worst month in 6 years)

 

S&P's tech back at 6-month lows...

 

FANG stocks tumbled to 6-month lows... (down 17% from the July highs)

 

Look at NFLX!!!!

 

And one last pillar for the bulls to rely on - the tightness of credit spreads - has collapsed with HY CDX blwoing out to 382bps - its widest since Dec 2016...

 

As one would expect (for a change), the plunge in stocks sparked a bid for bonds... with the belly (5Y and 7Y) dramatically outperforming...

 

With 5Y Yields  back below 3.00% once again... yields flushed notably lower into the close - is this the start of the big short squeeze?

 

And 10Y yields could have a long way to fall...

 

And at the short-end, markets are pricing more and more dovish rate trajectory - 2019 now expected to only produce 43bps of hikes with 2020 and 2021 now implying expectations for a rate cut...

 

The Dollar Index spiked from the EU open to US close for the 3rd day in a row...

 

To its highest since June 2017...

 

And as the dollar rallies, EM FX tumbles...

 

With the Rand plunging most...

 

With dollar gains, commodities largely ended the day lower (despite some vol in crude)...

 

Finally, just in case you hadn't notice, the US housing market is in freefall - here's some context...

Did not end well the last time... And it appears the SMART money is already in mass exodus...

“Trump is very politically savvy,” said Marc Chandler, chief market strategist at Bannockburn Global Forex.

“If the stock market sells off he’s got a target -- it’s the Fed’s fault. And if the Fed does begin to pause then Trump will be able to claim it as a victory. This puts Powell in a no-win situation.”

And what does it mean when the stocks of the world's most systemically important banks have crashed 30% to the lowest since Trump's election...

Probably nothing...