Pandemic-onium Sparks Global Market Meltdown, Bonds Soar Most In 5 Years

After months of cool, calm, and collected risk-on rallies, January saw traders shit the bed as BTFD strategies faltered across every asset-class…

…as The Fed balance sheet stopped expanding…

Source: Bloomberg

How bad was January?

US Stocks worst start to a year since 2016
China stocks (futures) worst start to a year since 2016
UK Stocks worst start to a year since 2014
Biggest January jump in VIX since 2014
Treasury yields biggest January drop since 2015
Yield curve flattened 2nd most in four years
Copper’s worst start to a year since 2015 (and worst losing streak in history)
WTI’s worst start to a year since 1991
Gold’s best start to a year since 2017

And as stocks and industrial commodities plunged, so the rates market panicked and started to price in almost 2 rate-cuts in 2020 – Please Jay Powell, save us!!

Source: Bloomberg

Chinese markets have been shut all week but judging by A50 futures, the Shanghai Composite is set to open down 350 points (about a 12% drop)

Source: Bloomberg

Europe was red across the board with UK’s FTSE worst as Brexit Day finally arrives…

Source: Bloomberg

“Dead-Bat-Bounce” Dies.

US markets ended the month on an escalatingly ugly note with The Dow joining Trannies and Small Caps in the red for the month and the S&P clinging to unchanged…

The final pumpathon from the Task Force was desperate to get the S&P back above 3230.78 – positive for the year…

Things could have been worse – AMZN saved the Nasdaq and S&P from worse days, and IBM saved The Dow from being even uglier.

AMZN joined the ‘cuattro comas’ club…

Source: Bloomberg

Notably, 2020’s top-five S&P 500 gainers contributed more points to the index than in any other January going back to 1999.

Source: Bloomberg

Notably stocks really accelerated as prices dropped through their peak exposure and gamma flipped negative…

All the US majors fell back through to to crucial technical levels…

Dow futures plunged over 600 points back near the Iran Missile Strike spike lows from early January…the Strike Force press conference at the end of the day was used to manipulate prices off the lows