US equities are down 10 of the last 11 weeks – the first time since 1970.
But, The Dow has now had 11 down weeks out of the last 12. This has never happened before… (in Nov 1929, The Dow fell for 10 of 11 weeks)…
Which perhaps fits as US macro data is collapsing at an unprecedented pace (with UMich sentiment at record lows)…
Source: Bloomberg
Remember, there are 12 more rate-hikes priced in from here… good luck America.
JPM head of trading desk, Elan Luger “I think we are past inflation at this point. The only thing confirmed yesterday is that the Fed will to do whatever it takes to get inflation back to target. If that means slowing the economy to a halt and crashing the stock market, so be it”
— zerohedge (@zerohedge) June 17, 2022
The US equity markets suffered their worst week since the government locked down the US economy due to COVID in March 2020.
In fact, since the hotter-than-expected CPI print (and UMich) last Friday, Small Caps are down a stunning 10%, S&P and Nasdaq down 8% and the Dow down 7%
Energy stocks have been hammered since CPI last week (with this week’s losses the worst since March 2020) while Staples have held in as the prettiest horse in the glue factory…
Source: Bloomberg
And here’s some more context for this slump in stocks (courtesy of Saxo’s Peter Garnry)…
While the stock market is still higher since Nov 2020’s election date, the S&P 500 is now down since President Biden took office…
Source: Bloomberg
The equity put-call volume ratio has shifted up to its highest since April 2020…
Source: Bloomberg
Also of note, Bloomberg’s SMART Money Flow Indicator has been surging higher into this selloff in stocks (are they primed for a big squeeze?)
Source: Bloomberg
Credit markets continued their collapse this week with HYG (HY Corporate Bond ETF) tumbling to its lowest level since The Fed started panic-buying HY debt in March 2020…
Source: Bloomberg
Treasury yields were up by a surprisingly uniform 5-7bps this week, but since last Friday’s CPI, the curve is notably flatter with 2Y up over 30bps and 30Y up around 10bps…
Source: Bloomberg
This smashed the yield curve (2s30s) down to cycle lows, briefly re-inverting once again…
Source: Bloomberg
The 10Y Yield stalled twice at around the 3.50% level this week
Source: Bloomberg
Japanese bond markets were making headlines this week as traders bet they could ‘Soros’ The BoJ’s yield curve control limit and bet on a break at this week’s BoJ meeting. For now they haven’t and the bets have eased offf but as the chart shows, futures are still trading well beyond the 25bps limit…
Source: Bloomberg
European bonds were also at the center of chaos as The ECB was forced to address ‘fragmentation’…
Source: Bloomberg
The dollar rallied on the week after finding support at pre-CPI lows…
Source: Bloomberg
Yen plunged by the most since March 2020 after trying to protect the yield curve…
Source: Bloomberg
Worst week for bitcoin (down 30%) since March 2020, but Ethereum was down worse, losing 35% this week alone!
Source: Bloomberg
Amid crises at several crypto lenders, Ethereum (which formed the backbone of some of the contracts involved in these transactions), has been monkeyhammered (down to $1050 at the lows) and has broken out to the downside relative to Bitcoin…
Source: Bloomberg
Also note that on a weekly basis, Bitcoin has never been this oversold…
Source: Bloomberg
Commodities are all lower on the week amid recession and monetary-policy-tightening fears. We again use the anchor pre-CPI to show the full extent of the fear with crude and copper clubbed like baby seals and PMs actually holding in around unchanged from those pre-CPI levels…
Source: Bloomberg
XOP – the oil & gas exploration ETF – tumbled into a bear market this week. It was the worst week for broad energy stocks since March 2020
Worst week for WTI since April (Biden SPR Release)
Worst week for wholesale gasoline since March 2020
Despite the tumble in crude and gasoline, the 3-2-1 crack spread remains very elevated – incentivizing refiners (if only they had the capacity) to produce as much ‘product’ as possible…
Source: Bloomberg
Finally, as we detailed previously, TINA is dead (in Europe and the US) as US Treasuries now offer an ‘alternative’. In fact, as the chart below shows, bonds are at their ‘cheapest’ relative to stocks since Feb 2011…
Source: Bloomberg
But, in the interest of being fair and balanced, we note that market breadth is about as bad as it has ever been – and historically has prompted a rebound…
Source: Bloomberg
Of course, there is one big difference between all of those examples and the current one… The Fed balance sheet is shrinking (agreed it also did that in 2018/19 before Powell panicked) and The Fed is hiking rates dramatically (far more aggressive that from 2016-2019) as financial conditions are tightening at their fastest pace since the Lehman collapse…
Source: Bloomberg
How much more pain is Powell willing to inflict?
Perhaps that is why our ‘adjusted’ Misery Index is at its worst level since Jimmy Carter was president…
Source: Bloomberg
Let’s Go Brandon?
11 total views, 1 views today