Gold Surges Most Since 2009 After Fed Unveils QEternity, Stocks & Bond Yields Tumble

The Fed unveiled its ultimate bazooka today – unlimited buying of pretty much any- and every-thing until this all calms down. The problem is – it didn’t reassure investors as they’ve had 10 years of knowing that whatever The Fed ‘creates’ is simply money-printed delusion that does not reflect any real economic progress.

Fed announces unlimited QE and sets up several new lending programs pic.twitter.com/PXjedWTBcx

— MONETARY MAYHEM™ (@MONETARY_MAYHEM) March 23, 2020

Stocks knee-jerked higher thanks to their conditioned behavior – but that did not last as a rally is the last thing we need to force Washington to vote for the bailout bill, and stocks fell…

Erasing all of the gains in The Dow since Trump was elected…

Source: Bloomberg

Treasury yields tumbled on the headlines, spiked, then fell back to the lows…

Source: Bloomberg

But gold surged on the news, and kept surging…

For the precious metal’s best day since The Fed expanded QE1 in March 2009….

Source: Bloomberg

It appears it’s time to “turn the machines back on”…

US stocks were panic-bid into the close sending Nasdaq into the green… BUT right at the close, everything puked back into the red…

Source: Bloomberg

Nasdaq tried and failed to get green numerous times…

European markets all ended lower despite the brief surge on QEternity…

Source: Bloomberg

Meanwhile, there has been more volume in VIX calls with strikes 100+ this year than in the prior history of VIX options

Source: Goldman Sachs

IG credit crashed 30bps tighter today as VIX was steady and HY blew out further…

Source: Bloomberg

HY credit made new cycle lows (price), highs in spread as IG credit was bid on the QEternity headlines…

Source: Bloomberg

This was LQD’s biggest day since Sept 2008…

Source: Bloomberg

Treasury yields were very volatile around The Fed news but ended lower today with the belly outperforming…

Source: Bloomberg

10Y ended back below 80bps and 30Y back at its lowest close in 10 days…

Source: Bloomberg

The dollar rose for the 10th day in a row, rebounding off weakness on the Fed QEternity news…

Source: Bloomberg

The Mexican Peso continued its collapse to fresh record lows – it has been utterly destroyed in recent weeks…

Source: Bloomberg

In fact the entire EM FX space has collapsed to record lows as the dollar has soared…

Source: Bloomberg

Cryptos rollercoastered over the weekend, and rallied today…

Source: Bloomberg

Bitcoin bounced back above $6500 intraday…

Source: Bloomberg

Commodities were notably mixed with copper down hard but crude and the PMs popping…

Source: Bloomberg

Silver surged almost 7%, back above $13…

Gold spiked…

WTI Crude was down most of the day then was panic-bid into settlement…

While oil prices manged gains, Gasoline prices puked to 50c – the lowest since 2001…

Source: Bloomberg

Signaling lower pump prices ahead…

Source: Bloomberg

Finally, U.S. companies most inclined to buy back stock have rarely shown as much weakness as they have lately. That’s evident from the ratio between the S&P 500 Buyback Index and the S&P 500 Index.

Source: Bloomberg

The buyback gauge, tracking S&P 500 companies that spend the most on repurchases relative to market value, fell Wednesday to its lowest level versus the S&P 500 since May 2010. The low followed a 17% drop from a peak in November, according to data compiled by Bloomberg.

And, in case you were hoping it was nearly over…

Source: Bloomberg

It isn’t!

Guggenheim’s Scott Minerd offered a very insightful tweet to explain how we know there is more pain to come:

“How do we know when we have not reached the bottom? When the talking heads on CNBC are buying.”

Whatever The Fed is trying is not working…

Source: Bloomberg

And we give Sven Henrich the last word…

2019: There is no bull market without central bank intervention.
2020: There is no bull market even with central bank intervention.

— Sven Henrich (@NorthmanTrader) March 23, 2020