R.I.P.
Remember her.#RIP #ArethaFranklin
(via @RockWalkLondon)pic.twitter.com/Uw2QcCaMdB— Carl Quintanilla (@carlquintanilla) August 16, 2018
Overnight saw the world was saved by a headline…
CHINA VICE COMMERCE MINISTER TO VISIT U.S. FOR TRADE TALKS
US equity futures show the excitement the algos felt from that headline… The Nasdaq was unable to recover its losses from yesterday while The Dow and S&P did but late weakness across the big tech names went the S&P back into the red from Tuesday’s close. Nasdaq erased most of its post-Trade-Talks gains, The Dow soared 1.5%…
The Dow surged all the way up to last Tuesday’s close… this was The Dow’s best day since early April.
The big driver of The Dow’s 400 point rally was not WMT as everyone suspected given its huge move (WMT +60pts) – the big winners were all trade-related (BA +100, CAT, & AAPL). On the cash index side today, Nasdaq was the laggard and The Dow the biggest winner…
The Dow bounce extended its move off the 50DMA…
Nasdaq and Small Caps remain red on the week…
A tale of two retailers today…
FANG Stocks continued to slump back near 10% correction levels… led by a 3% tumble in Facebook
Here’s the odd thing though – US Stocks soared on the trade-talks headline… but China stocks ended the day notably weaker…
Oh and by the way, both US and Chinese is utterly sucking recently…
While stocks soared, Treasury yields barely moved, managing around a 1bps rise on the day (the long-end unchanged)…
The yield curve dipped very modestly flatter on the day.
Notably, Emerging-market sovereign dollar-denominated debt is trading at a wider premium than speculative-grade U.S. companies – a notable break from historic norms – underscoring economic and political stresses around the world, while America Inc. powers ahead…
The Dollar ended the day marginally unchanged, after dipping to unchanged on the week before rallying this afternoon after Mnuchin’s comments about new sanctions for Turkey…
The Turkish Lira ended higher but was spooked by Mnuchin’s threats…
While everything seemed awesome if you just looked at US equities, some EM currencies continued to collapse.
South African Rand was worst…
And the Indian Rupee hit a new record low…
Of course the biggest news was the Yuan’s surge… on the back of headlines some Chinese officials will take a late summer vacation to Washington…
This was the biggest surge in offshore yuan since Jan 2017… the last time CNH neared 7.00!!
Which is coincidentally the same level that seems important to Turkey – look at the rebound after the Lira and Yuan hit parity…
Cryptos rallied broadly on this down-dollar day, but only Bitcoin remains green on the week…
Commodities all managed gains on the day but remain ugly on the week…
Today’s US stock market behavior was ‘odd’ in word, as Gluskin Sheff’s David Rosenberg notes…
A 400 point surge in the Dow and a 1 bp rise in the 10-year T-note yield don’t typically go hand-in-hand. The stocks moving are the ones that respond to “trade” news plus WMT, which is benefiting from blowout food-related revenues (over half comes from food and staples).
— David Rosenberg (@EconguyRosie) August 16, 2018
The Dollar and Bonds ended practically unchanged and The Dow soared…
And finally, just in case you were wondering what sparked all this global weakness…
We’re gonna need to turn that spigot back on!!!
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