The ECB hiked rates by 75bps as expected but the somewhat dovish language sent Bund yields (-25bps) and EUR lower on the day. 10Y Bund yields tumbled back below 2.00%…
Source: Bloomberg
EUR back below parity against the dollar…
Source: Bloomberg
US stocks gained some ground on the ECB but tumbled on the US cash open, then ripped back after another Democrat demanded Powell stop hiking rates (but not for political reasons of course).
That rally last about 45 minutes, and then… (amid Putin’s address), the nuke threats started from Washington:
*AUSTIN DESCRIBES RUSSIA AS ‘ACUTE’ THREAT TO US VALUES, WON’T RULE OUT NUCLEAR USE AGAINST NON-NUCLEAR THREATS, DEFENSE STRATEGY SHUNS LIMITS ON USE ONCE EMBRACED BY BIDEN
And stocks sank. Nasdaq was monkeyhammered 2% lower and along with the S&P closed red. The Dow was the only major to manage gains, helped by CAT (which added over 100pts alone)…
Shorts were squeezed again at the open, but – again – that didn’t last…
Source: Bloomberg
But call demand continues to dominate put demand as there is no fear…
Source: Bloomberg
Notably, VIX was flat to down today despite the S&P being down… once again as we suspect puts were covered (pressuring vol lower)…
Source: Bloomberg
META was clubbed like a baby seal (-24% – its second worst day ever), tumbling to 6 year lows, down 75% from the highs (with Zuck down over $100bn in net worth since the highs!!)…
Source: Bloomberg
The market cap of the FANG stocks is back below pre-COVID highs…
Source: Bloomberg
Just for some context, the impact of GOOGL, MSFT, and META (among others) has prompted the biggest 2 day outperformance of the equal-weighted Nasdaq over the cap-weighted Nasdaq since Nov 2012…
Source: Bloomberg
As month-end spookily looms on Monday, the spread in US Majors is massive (Nasdaq +2% but The Dow +12% MTD)…
Source: Bloomberg
Most notably today we saw rate-trajectory expectations dovishly dive (GDP Price indices fell a little?) with terminal rate dropping and rate-cut hopes rising.Note that the Fed terminal rate (in May 2023) is down from 5.03% last Friday to 4.78% at its lows today…
Source: Bloomberg
That helped send UST yields dramatically lower with 5Y outperforming (-8bps) and 30Y the relative weakest. However, from the day’s highs, the swing in yields was huge 15-20bps across the curve. The main buying pressure in TSYs was from the GDP data to the European close…
Source: Bloomberg
10Y Yields dropped back below 4.00%…
Source: Bloomberg
The BoJ is set to announce tonight… will they comment on the fact that their YCC has broken?
Source: Bloomberg
The dollar rebounded modestly after 2 ugly days…
Source: Bloomberg
Bitcoin drifted lower today after 2 days higher…
Source: Bloomberg
Gold also drifted lower today
With the easing of rate expectations, and despite the ugly durable goods data (perhaps offset by US GDP), oil prices rallied today with WTI back abive $89.50…
US NatGas, on the other hand, was smashed lower (back below $6)…
Finally, is it over yet?
Source: Bloomberg
Maybe… but Nasdaq never made it back to those levels for years.
