Financial news

Stocks & Bond Yields Sink Amid Quad Witch Chaos, Trade Turmoil, & Powell Promises

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Via Zerohedge

While Jay Powell did his best to promise more QE – spiking stocks – China trade headlines spoiled the stock market party by week-end, but bonds and gold were bid.

The odds of a trade deal tumbled…

Source: Bloomberg

Interesting that Fed’s Bullard said that “IT COULD BE WE ARE OVERESTIMATING TRADE WAR IMPACT”

The Fed remains its most split ever:

And among all of this is the Fed’s biggest liquidity crisis in over a decade (that will now continue until October 10th) – that few understand and so will just brush off… until its effects ripple out…trade accordingly.

Chinese markets ended the week lower…

Source: Bloomberg

European markets continued their bounce today, scrambling back into the green for the week…

Source: Bloomberg

The China headlines spoiled Powell’s spike, leaving all the major indices red for the week (Trannies worst)…

The S&P 500 algos were seemingly desperate to pin around 3,000 – thanks in large part to the gamma from quad witch… but failed!

The S&P 500 is up 2.4% from its highs a year ago…

Source: Bloomberg

After the quant quake, momo factor stocks soared this week (after crashing 10% last week) – biggest weekly gain since May 2016…

Source: Bloomberg

Roku was routed for the second week in a row (but is still up 240% YTD)…

Source: Bloomberg

 

After the bond bloodbath last week, Treasury yields tumbled this week with the long-end dramatically outperforming…

READ ALSO  China holds key economic meeting to plan for 2020

Source: Bloomberg

10Y Yields fell back below 1.75%…

Source: Bloomberg

The volume of global negative-yielding debt re-accelerated again this week…

Source: Bloomberg

Between the IPO debacle and comments from Fed’s Rosengren, WeWork bonds tumbled…

Source: Bloomberg

 

Of course the liquidity crisis was front and center for many. As Bloomberg’s Edward Bolingbroke notes, it’s been a turbulent few days for U.S. swap traders amid the repo rate surge and the subsequent emergency liquidity measures.

Source: Bloomberg

On Thursday, the spread tightened to a record low, in a sign the market was disappointed that the Federal Reserve hadn’t introduced a permanent solution to address concerns of a funding squeeze. The two-year swap spreads rallied after the New York Fed announced more repo operations, showing that worries over financing costs were ebbing.

The spread between Effective Funds Rates and IOER blew out…

Source: Bloomberg

 

The Dollar Index ended the week higher but chopped around like a penny stock…

Source: Bloomberg

Yuan tumbled after today’s canceled trade meeting…

Source: Bloomberg

 

Source: Bloomberg

 

Source: Bloomberg

 

Source: Bloomberg

 

Source: Bloomberg

Copper was worst on the week as PMs managed gains (silver outperforming) while crude surged…

NOTE – the china trade headlines sent crude and copper lower today and PMs higher

Source: Bloomberg

Gold bounced back up off $1500 after falling back to that level after the Saudi spike…

 

After the bombing of a Saudi refinery last weekend, oil prices ended up 6% on the week (well below the 15-20% initial spike)…

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Palladium surged to a new record high…

Source: Bloomberg

Lean Hogs were limit down after China canceled its trip to farmland

 

And finally, just in case you wondered, this is the longest and deepest PMI cycle of the past 20 years

“Transitory”?

But, “buy and hold”…



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