Bonds, Bitcoin, & Bullion Jump; Stocks Dump On Powell-Pullback, Trade-Talk

A stunned equity market could not believe that Batman Powell and Doveboy Bullard dared to talk down the odds of a 50bps rate-cut in July...

 

Ugly day in China overnight after Monday's snoozefest...

 

Mixed bag in Europe with a weak open but France and Spain rallying into the close (still red on week)...

 

Ugly US housing and confidence data did not help but the cash open saw immediate selling of the modest overnight gains. The ugly data sent the US Macro Surprise Index near its lowest since June 2017...

And while Richmond Fed's headline beat, expectations for local business has crashed to a record low... (which seems very odd considering the Richmond Fed head said today that "US Consumer dynamics remain great.")

Then these hit and spoiled the party...

  • 1230ET Bullard - no need for 50bps

  • 1300ET Powell - monitoring, won't bow to political pressure

  • 1330ET Trump-Xi meeting at G-20 not expected to produce a deal

All of which sent stocks lower for the second day... Trannies are the week's worst performer followed by Nasdaq and Small Caps. For now The Dow is doing best but still lower since quad-witch...

 

Not a pretty day at all...

 

As the Nasdaq pushed back towards its 50DMA

 

Winners of June have been losers this week...

 

Abbvie and Allergan's mega-deal did not end well for the former... ABBV lost a stunning $18bn in market cap on this deal...

 

VIX and Stocks remain decoupled...

 

As July odds for a 50bps rate-cut swung violently from 40% (pre-Bullard) to 16% (post-Powell) and back up to 26% after the 'no trade-deal' news...

 

Credit markets have seen notable decompression in the last few days...

 

Treasury yields continued to fade today except flat 2Y (despite a spike on Bullard headlines)...

 

10Y yields tumbled below 1.98%...

NOTE - this is the lowest closing yield for 10Y since Nov 8th 2016

 

The dollar spiked today on Bullard/Powell but faded on trade and in context to the post-FOMC move, it was nothing...

 

 

Bitcoin extended its gains, testing near $11,500 intraday (the highest since March 2018)...

 

As the big crypto tracks its 2017 analog...

 

But the rest of the crypto space did not play along...

 

Silver was down on the day as Copper, Crude, and Gold managed gains...

 

Gold was a little noisy intraday on the FedSpeak (pushing the dollar around) but held gains breaking to new 6-year highs overnight...

 

Gold/Silver soared to a new cycle high...

 

Gold's "VIX" soared to 3 year highs, decoupling from other asset-classes...

 

Finally, don't forget, there's only one thing that matters...

And if The Fed doesn't pay up and give-in to the market's 50bps demands, the jaws of death will snap shut...