Bond Bloodbath Batters Big-Tech As Small Caps Surge On Short-Squeeze

Futures were all positive overnight, but as the European session started, selling pressure in stocks began with Nasdaq notably underperforming into the US cash open. At the equity open, things went just a little bit turbo as Small Caps exploded higher and Big Tech tumbled…NOTE things weakened a little into the close (after Fed’s Kaplan joined Rosenburg in retirement)…

Today’s surge in Small Caps relative to Nasdaq was the largest divergence since March and pushed the pair up to significant resistance…

Biggest short-squeeze in 6 weeks today…

Source: Bloomberg

Just as we noted earlier, 4430 was the key level for the S&P today…

But it was the rotation from growth to value that really stood out – and it all happened at the open…

Source: Bloomberg

And if real yields are to be believed, we should expect considerably more underperformance of tech relative to small caps from here (or a collapse in yields)…

Source: Bloomberg

Nasdaq 100 is on course for its worst month since October 2020…

Source: Bloomberg

Energy and Financials outperformed while Tech and Utes were the laggards. BUT note that all the price action occurred around the open with no follow-through buying during the day

Source: Bloomberg

But we can still hear all the freshly minted stock trading experts cry…

Treasury yields made lots of headlines today, extending the carnage from last week with a wall of selling starting as Europe opened. Chaos hit the TSY market around the Durable Goods data and the cash equity open, but it was the belly that underperformed…

Source: Bloomberg

30Y Yields topped 2.00% (spiking to almost 2.05% intraday), but hit resistance there again and ended back below 2.00%…

Source: Bloomberg

10Y Yield rose above 1.50% – its highest since June – but was also unable to hold it and closed below 1.50%…

Source: Bloomberg

The dollar ended unchanged, having chopped around all day (remaining well within the range created during The Fed day moves)…

Source: Bloomberg

Cryptos have has a wild ride over the last few days, plunging on China’s “ban” then recovering most it and then fading a little today…

Source: Bloomberg

WTI continued to its rise, back up near early July highs at almost $76 for the front-month…

NatGas futures surged once again, topping the mid-month highs to its highest since Feb 2014…

Source: Bloomberg

And NatGas vols are exploding…

Source: Bloomberg

And gold was unchanged…

Finally, despite all the jawboning from Washington, Friday’s optimism about getting a debt ceiling done in a timely manner has evaporated with the kink in the Bill curve now at its widest in this cycle…

Source: Bloomberg

What will it take to get all the Democrats to line up? a 20% plus drop in stocks maybe?

Source: Bloomberg