Stocks, Credit, Yield Curve Collapse After Mnuchin "Market Over-Reacted" Jawbone Fails

Stocks dropped to sessions lows, with the Nasdaq following the Russell 2000 and Tokyo-traded shares into bear-market territory, after Treasury Secretary Steven Mnuchin said Thursday that the market "overreacted" to Fed Chairman Jerome Powell's remarks a day earlier.

  • MNUCHIN SAYS MARKET OVER-REACTED TO FED'S COMMENTS

  • MNUCHIN: MARKET WAS DISAPPOINTED WITH FED CHAIRMAN COMMENTS

  • MNUCHIN SAYS HE FOCUSES ON FED'S INFLATION PROJECTION

  • MNUCHIN: IF LOW INFLATION CONTINUES, FED RATE PATH MAY CHANGE

  • MNUCHIN: WE'RE COMFORTABLE WITH TREASURY SUPPLY, NOT AS WORRIED AS MARKETS APPEAR

But the market seems anxious that Mnuchin feels the need to jawbone this back... and it's failing fast.

All the major indices are falling hard..

The Nasdaq just entered a bear market and is down 5% from the FOMC Statement...

As FANG Stocks crater...

And VIX is above 28...

And if The Fed keeps 'normalizing', expect it to get a lot worse...

Across the majors:

  • Dow -15%

  • S&P -16%

  • Nasdaq Composite -20%

  • Trannies -22%

  • Russell 2000 -24%

  • FANGs -29%

  • GSIBs -35%

  • Goldman Sachs -39%

Credit markets are crashing...

And the yield curve is flashing bright red policy error signals...2s10s down to signle-digits

And don't forget tomorrow is Quad witch.