While stock investors were cruising at top speed, they seem surprised that they didn’t see the trade tariff bump in the road…
Chinese stocks slumped once again overnight…
With CHINEXT (China’s tech/small cap index), plumbing new lows since August 2014…
Mixed bag in Europe with DAX (trade fears) lagging and Italy best…
Kudlow’s reaffirmation during a CNBC interview around 1251ET sent stocks legging lower… and then reports of a Trump announcement after the close sent them lower once again…
First drop for the S&P 500 in the last six sessions.
Before and after trading through trade war news for a few months pic.twitter.com/BYNjsKPdSE
— Hipster (@Hipster_Trader) September 17, 2018
FANG stocks led the way… biggest drop in 2 weeks, closing at one-month lows…
AMZN and AAPL were the biggest weights on Nasdaq…but notably jumped after headlines noted smartwatches were exempt from next round of trade tariffs… However, selling pressure resumed leaving AAPL and AMZN with their biggest loss since April
Banks were lower overall on the day with the big banks mixed (C, JPM higher, rest lower)…
Treasury yields started the day off higher but faded as stocks sank… to end unch (30Y) to slightly lower in yields across the curve…
10Y yields actually topped 3.00% but were back below it by the close…
Bear in mind that 10Y Yields have only closed higher than 3.00% once since May 23rd…
The Dollar Index rolled over, erasing Friday’s gains…closing near its lowest close since Aug 29th
Offshore Yuan was very modestly stronger on the day but faded after Trump’s comments…
Very mixed day in EM with Real surging 1.3%…
But Lira tumbling 2.4%…so much for that surprise 625bps rate hike..
Cryptocurrencies legged lower once again…
Dollar weakness sent PMs and Copper higher but Crude faded around the same time as Kudlow confirmed trade tariffs to come…
Gold rallied back above $1200…
WTI fell back below $69…
Finally, we note that ‘soft’ survey data has rolled over, heading back down to ‘hard’ data’s reality perhaps?
Oh, and one more thing…Hedge funds pursuing long-short equity strategies have record exposure to the S&P 500 Index, judging by the portion of their returns attributable to the benchmark, a measure known as beta. It all raises the danger that the next sell-off will be amplified by quants and discretionary hedge funds beating a retreat.
“probably nothing”
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