Dow Surges Despite Crude, Credit, Crypto, & Kudlow Chaos

The day started with hopeful headlines about Trump and Xi having a cozy dinner and ended with China's US ambassador warning of "all-out conflict"...

 

Chinese markets see-sawed once again around unchanged on the week...

 

Early gains in European stocks faded as EU-Italy tensions rose once again...

 

Of note overnight was the chaotic spike (and dump) in stock futures on a headline that is a month old...

 

A roller-coaster day in US equities, but Small Caps were clubbed like a baby seal compared to the rest of the market...(Nasdaq was ramped into the green in the last 30 mins)

 

It looks like Dow is trying to get back to even with Small Caps on the month...

 

Futures show the overnight swings best...(again broadly speaking buying panic started as US opened)

 

GM shares tumbles as Trump threatened to remove all subsidies and erased all of yesterday's gains...

 

FANG Stocks gave up their gains amid trade tensions...

 

Credit markets are suffering despite the ongoing drop in VIX... (now where have we seen this before)

 

With LevLoans collapsing...

 

And HY Energy bond risk soaring...

 

Treasury yields ended the day practically unchanged despite some notable intraday gap moves...

 

Notably, a brief rise in Eurodollar curves after Clarida's hawkish comments was lost as trade concerns re-emerged...Notably there was lots of other Fed speak today and none of it hinted at any dovish tilt to the hawkish Powell rate-hike treajectory...

 

Inflation breakevens tumbled into the red for 2018, catching down to the collapse in crude...

The Dollar surged once again back up near 2018 highs...

 

As the USD rallied, offshore Yuan weakened notably against it...well below the Yuan fix

 

Cryptos were relatively stable for the second day in a row...

 

Dollar strength sent PMs lower and China tensions did not help copper or crude (until oil was panic bid)...

 

WTI Crude slumped back to a $50 handle...before being panic bid back above it

 

Gold broke back below its 50- and 100-DMA...

 

Finally, we note that much has been made recently of how great the US economy is and how weak China is... For instance:

Kudlow: "Our economy is in good shape, China's is not"

As of this week, that is not true...

Either way - they are all going down the same path unless someone starts printing money again soon...