RIP FANG

The message from many investors today to their favorite stocks...

 

Most indices extended last week's outlier exuberance in Chinese stocks, except tech/small cap-dominated CHINEXT  dropped...

 

European stocks saw selling from shortly after the opening bounce to all end lower led by DAX... (as automakers got hit across the board after Carlos "Gone")

 

It was all looking so hopeful at around 3amET as the overnight weakness in futures had been ramped into the European open, but as soon as AAPL headlines hit... along with every other previous leader - US equities cratered at the open and barely looked back...

 

On the day, Nasdaq was worst across all the cash indices (Nasdaq Composite now at its lowest close since April)

NOTE - there was no dramatic volume selling programs on the day

Dow futs had a 600 point range intraday... (this is the first Dow cash close below 200DMA since Oct 31st)

 

Only Trannies remain green for November...

 

For 2018, S&P is now up less than 1% and Nasdaq Composite up only 2.2%...Small Caps and Trannies are negative YTD

Viewed another way: the Nasdaq 100 is still up 4 percent this year. But so good has its performance been in the last decade that a gain of that size qualifies as the second-worst annual return since the bull market began. The index has now had three separate 10 percent corrections in 2018, something that hasn’t happened since the financial crisis.

FANG Stocks at their lowest since February...

For some context - that is a $610 billion drop in market cap between those four names.

Cap-weighted FANG stocks are down 26.5% from their highs, deep in bear market, and all the underlying names are also now in a bear: FB -39.6%, AMZN -25.8%, NFLX -35.9%, GOOGL -20.2%

 

Value stocks are soaring relative to Growth stocks...

 

AAPL at new cycle lows below the 200DMA...down 20.2% (in a bear market)...

 

VIX jumped back above 20 and the term structure re-inverted...

 

High Yield credit continues to blow out across ETFs, cash, and CDS...

 

And investment grade credit risk is now at its widest since Trump's election in Nov 2016 (but still underpriced relative to VIX)...

 

Suggesting there's a lot more pain to come for stocks...

 

Treasury yields fell broadly on the day (after being higher overnight)...

 

And notably bull-steepened... (back near the Nov peak, steepest since June)

Although we note that it seems like 55bps for 2s30s is a cap for now.

 

10Y Inflation Breakevens plunged to their lowest since Jan 3rd, catching down to crude's collapse...

 

And for the first time in decades, a 12-month Treasury bill has a higher yield than one-year Chinese debt...

 

The Dollar fell for the 4th day in 5, extending losses below the key 97 level...

 

And offshore yuan dropped back below its Onshore Fix...

 

Cryptos continued their crashing trend today with Bitcoin back below $5,000 briefly...

 

Commodities ended marginally higher on the day...

 

Gold rallied and held above its 50- and 100-DMA (Silver tested its 50DMA but couldn't break it)...

 

WTI Crude futures managed a modest bounce

 

Finally, we note that Fed rate-hike odds - and trajectory - are tumbling with only 31.5bps of tightening now expected next year and 2020 and 2021 both expected to see rate-cuts...

As markets have entirely decoupled from The Fed...