Big-Tech & Bonds Battered But Bitcoin Bid On ‘Blue Wave’, Gold Pumped’n’Dumped

Well, that was quite a day!!

As it became clear the Republicans were losing the Georgia race, early this morning Bill Blain noted earlier that he was pinged awake by an American chum:

“This is bad in so many ways that people don’t yet realise. America’s second civil war has now officially begun.”

Blain added that this was from a senior Republican not given to hyperbole.

After a major divergence overnight as Georgia signaled a ‘blue wave’ loomed (Reflation trade – Small Caps up, Nasdaq down), stocks soared out of the gate as soon as the cash market opened (and Schumer promised $2000 checks for all). But that all fell apart as scenes of protests in DC sparked major selling. The S&P is back to unchanged YTD and Nasdaq down 2% while Small Caps are up over 4% YTD…

Tech stocks were the only sector to end red today… despite the utter chaos in DC?… but financials were best…Energy names remain best in 2021 for now.

Source: Bloomberg

Banks love Bidenomics and the Blue Wave…

Source: Bloomberg

FANG Stocks tumbled to lowest close since Thanksgiving

Source: Bloomberg

The Small Caps-Big-Tech rotation surged up to its highest since March…

“Most Shorted” Stocks were screaming higher in 2021, until the Capitol was breached…

Source: Bloomberg

As we noted in December:

And since it is the most shorted stocks that end to do far better than the most popular ones, especially during market-wide squeezes such as the one seen since March, here is also the list of 50 most-shorted stocks. As usual, our advice is to go long the most hated names and short the most popular ones – a strategy that has generated alpha without fail for the past 7 years, ever since we first recommended it back in 2013.

Seems like that worked out well.

VIX spiked back above 26 after falling to a 22 handle early in the day…

Treasury yields surged on the ‘blue wave’ reflation trade…

Source: Bloomberg

With 10Y Yields bursting above 1.00%. While the surge felt large, the last two days 13bps jump is smaller than the 16bps jump in early November after the election night…