Goldilocks Is Dead: Stocks Slammed Despite Trade-Truce, OPEC Deal, & Jobs Gains

In a week in which we got a trade-truce, the market all but pricing out any Fed hawkishness, and Alberta cutting crude production and an OPEC deal; stocks in Europe and US collapsed...

Let's hope for The Santa Claus Rally... any day now...

China ended the week marginally higher (having erased almost all of the post-Truce gains)...

 

European markets were a bloodbath however, led by Germany... (down over 6% from its Monday exuberant highs to its lowest in 2 years)

 

Deutsche Bank ended the week below $8...

 

Before we start, everyone seemed to crow about the jobs print this morning as a 'Goldilocks' number - well they were half right - Gold is the only asset green...

Futures how the real chaos this week...

Bloomberg's Cameron Crise notes that yesterday's crazy dump and pump was only the 13th time since 1980 that the S&P rallied more than 2.8% but still closed lower from the previous day. Six such episodes occurred during the 2001 and 2008 recessions. The last time it happened was in May 2010 amid the European debt crisis, as my colleague Luke Kawa noted.

On the cash side it was an ugly week... with Trannies down 8%!!! (worst week since 2011), Small Caps worst week since Jan 2016

This happened despite utter desperation from Fed's Bullard and Brainard suggesting uber-dovishness.

The Dow and S&P back into the red for 2018 and Nasdaq up less than 1% (and Trannies and Small Caps are ugly)

 

All the major US equity indices plunged back below key technical support levels...

 

The S&P 500 'Death Crossed' today...(the last time it death crossed was Jan 2016 as the S&P dropped 13%)

 

"Most Shorted" Stocks were squeeze Monday morning and Thursday afternoon, but ended the week lower...

 

Financials were FUBAR this week - plunging most since March to the lowest since Sept 2017

 

Regional Banks were crushed... (notably the Monday surge tagged the 50DMA which seemed to trigger stops)

 

And the big banks bloodbathing...

 

Global Systemically Important Banks are down 33% from the highs and have erased all post-Trump gains...

 

FANGs are down 24% from their highs...

 

With NFLX leading the collapse... (down 11% from Monday highs)

 

AAPL tumbled below $170 to six-month lows...down 27% from its highs and in the red for 2018

And Alphabet ended the week red for 2018...

 

Credit markets continued their collapse...

HY and IG closed at cycle wides...

 

And LevLoans crashed...

On record outflows...

 

Bonds were right after all... Stocks enjoyed 24 hours of excitement on Sunday/Monday before catching down to reality...

 

Treasury yields tumbled all week led by the long-end...

 

10Y Yield dropped to key support...

 

With dramatic flattening... 2s5s are down for 8 of the last 9 weeks...

 

And inverted...

 

Inflation breakevens soared early on as WTI spiked on the OPEC deal, but lost contact as the day wore on...

 

The Dollar ended the week marginally lower - but had a very wild ride...

 

Interestingly, while stocks all tumbled, erasing trade gains, offshore yuan ended the week notably higher - the best week for Yuan since January!

 

Cryptos crashed again...

 

PMs rallied on the week, copper tumbled...

 

On the heels of the OPEC 'deal', WTI jumped over 5% - its best week since June...BUT it seems like $54 is the limit for WTI for now...

 

Amid all the chaos, gold jumped almost 2%, the best week for the precious metal since March...

 

Additionally, despite Yuan's best week in 11 months, gold outperformed to its strongest since October...

 

Silver broke back above its 50DMA...

 

Finally a chart that fascinates us - the price of a barrel of oil in ounces of silver - it seems 5 ounces is just too rich for demand...

 

Don't forget - last week was the best week for stocks in 8 years... followed by this week's worst drop since the March tech wreck.

Finally, a little context for this post-trade-truce week - China is higher, Europe has collapsed, and US stocks have tumbled...Xi wins?

And this plunge has happened as the eurodollar market has priced in massive dovishness...

And if cyclical stocks are right, bond bears face a serious bloodbath right ahead...

If the US economy/market cannot handle positive real interest rates, what is with this "world's greatest economy" narrative?

Macro data suggests Goldilocks is dead...