Stocks & Bond Yields Rise On Trade War Hope, Commodities Collapse Most In 28 Years

Stocks within inches of record highs and bonds within mm of record low yields... and all on the back of a call and a possible round of trade talks in a month...

"Awesome" as long as Powell delivers at least 125bps of rate-cuts in the next 15 months...

Source: Bloomberg

A big week for Chinese stocks with the tech-heavy ChiNext leading the way...

Source: Bloomberg

A big week for European stocks too, led by Italy which is now apparently 'fixed'...

Source: Bloomberg

30Y German bond yields very briefly went positive this week, but despite gains in stocks today, bonds were also bid...

Source: Bloomberg

Ugly end to the week for an exuberant post-mid-week pumpathon...the dump started at 330ET

Second day in a row that a late-day sell program hit...

Source: Bloomberg

After a tough open (with a holiday-shortened week), US equity markets soared/squeezed higher to end green with Nasdaq leading and Small Caps lagging...

 

Futures show the volatility intraday best (or extra-day in this case)...

 

Small Caps remain below the 200DMA...

 

As the odds of a US-China trade deal shot higher this week...

Source: Bloomberg

Cyclicals made a big comeback after the trade deal headlines, but defensives also ended the week positive...

Source: Bloomberg

 

Treasury yields ended the week higher (with 30Y +6bps, 2Y +2.5bps)

Source: Bloomberg

30Y Yields remained above 2.00% but tumbled during today's day session after the weak jobs data...

Source: Bloomberg

The yield curve steepened on the week but 3m10Y remains drastically inverted...

Source: Bloomberg

The dollar has fallen 4 straight days back to 2-week lows...

Source: Bloomberg

China's offshore yuan had its 2nd best week in 7 months, soaring back up near the fix by week's end...

Source: Bloomberg

Cryptos ended the week broadly higher, despite a sudden puke today, with Bitcoin a notable outperformer vs altcoins...

Source: Bloomberg

Despite today's tumble, Bitcoin ended the week back above $10k and increasingly set for a breakout one way or another...

Source: Bloomberg

 

Gold and Silver ended the week lower, crude and copper higher...

Source: Bloomberg

WTI spiked up to what seems like a magic number of $56.50 today...

 

Gold erased most of Trump's tariff tantrum gains (with some crazy vol today)...

 

No real surprise that things are getting a bit more volatile in gold as flows near record highs again...

Silver was also extremely volatile today...

 

Gold's drop tracked the fall in the value of global negative-yielding debt (Bitcoin decoupled)...

Source: Bloomberg

Gold rebounded from its intraweek underperformance against silver...

Source: Bloomberg

As Bloomberg details, soft commodities are on their longest losing streak in at least 28 years as trade tensions and currency swings add further woes to oversupplied markets. The Bloomberg Softs Spot Subindex tracking coffee, sugar, and cotton headed for the 10th straight week of declines, the longest stretch since 1991 when the index started.

Source: Bloomberg

“The ratcheting-up of trade tensions, which is of itself feeding into broader concerns about global growth” are putting pressure on prices, and the weak Brazilian real is adding stress on sugar and coffee, said Caroline Bain, chief commodities economist at Capital Economics in London.

Finally, we note that, with stocks within a percent of record highs and US macro data back into positive territory for the first time in 7 months, who would blame Powell for cutting 50bps... what could go wrong?

Source: Bloomberg

Since the last Fed rate-cut, the dollar and stocks are unchanged, bonds and bullion up around 6%...

If at first you utterly fail, try to cut rates again?