it did not take long for the market to flush today, when after a tentative drop following last night’s AAPL revenue guidance cut and the FX multi-flash crash, stocks took lows with the Dow plunging over 650 points this morning following the abysmal ISM Manufacturing report which showed that US mfg sentiment in December tumbled the most since October 2008.
Today’s drop has pushed the Dow to below the Dec 26 closing level, which preceded the historic 1000 point Dow move on December 27. Come to think of it, we are about 350 points from another 4-digit move in the Dow Jones, only this time to the downside.
The broad-based drop is being led by the Nasdaq, which is down over 3%, largely due to the Apple fiasco.
Stocks aren’t the only thing that is sinking: so are Treasury yields led by the belly, with the 10Y tumbling below 2.60%, and down the 2.57% last, the lowest level since January 2018.
Meanwhile, the 1Y yield is just 2bps away from surpassing the yield on the 10Y in today’s curve inversion watch.
Finally, with US recession fears front and center, the US Dollar is also tumbling while gold is surging.
And with everything going to hell in a hand basket, gold is just waiting for the right moment to pounce.
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