Bonds Bid Amid Crude Chaos As Fauci Frightens FANGs

The “Virus-Fear”-trade continues to tread water despite hopeful moves in the major indices this month…

Source: Bloomberg

But Dr. Fauci’s comments overnight seemed to spoil the party for the big momentum stocks…

Source: Bloomberg

“So it’s not going to disappear from the planet, which means as we get into next season, in my mind it’s inevitable that we will have a return of the virus or maybe it never even went away. When it does, how we handle it will determine our fate,” Fauci commented overnight, adding that he was “almost certain” the virus will return in the winter.

So Fauci’s warning to the world is simple “Winter is coming”

Nasdaq was the biggest loser for a second day in a row with S&P and Dow failing to cling to unchanged as Small Caps and Trannies squeezed higher again… (another weak close)

A third day of opening short-squeeze today but the squeeze ran out of ammo fast…

Source: Bloomberg

And FANG stocks, for instance, suffered their biggest 2-day drop in six weeks…

Source: Bloomberg

Crude markets were total chaos as Index/ETF shifts and imminent futures contract rolls did not help with the front-month illiquidity…

Rather surprisingly, given the endless commentary last month-end, we have barely heard a peep from the likes of CNBC about the massive equity outperformance in April and the need for rebalancing flows against stocks and into bonds…

Which may help explain why bonds were aggressively bid today…

Source: Bloomberg

10Y broke back below 60bps intraday…

Source: Bloomberg

The Dollar dived for the second day in a row (note all the dollar selling pressure comes in Asia)…

Source: Bloomberg

Cryptos were generally flat today except for Ripple which surged…

Source: Bloomberg

Gold was marginally lower today (second day of dollar and gold lower together)

Total chaos in crude markets as the front-month swung violently around, only to end almost unchanged…

Finally, as consumer confidence plunged by its most ever, hunkered-down Americans show no appetite at all for a vacation anytime soon…

Source: Bloomberg

As Bloomberg notes, a record-low 32% of consumers said in April that they’re planning to take a vacation in the U.S. or outside the country, the Conference Board’s consumer confidence report showed Tuesday. While not surprising, that’s bad news for a travel industry hoping coronavirus-mitigation efforts will ease health concerns and get the economy on its feet a little quicker.