Powell Sparks Taper Tantrum, Bonds Scream Policy Error

TL;DR…

Powell broke the market

— zerohedge (@zerohedge) November 30, 2021

Equity investors got a double dose of potential tightening, in terms of monetary policy (Powell taper tantrum) and bank regulation (Liz Warren’s best buddy potentially in charge), on top of Omicron anxiety…

Between the tightening talk and Omicron anxiety, The Dow and Small Caps ended the month deep red, the rest of the majors unchanged, and Nasdaq eked out modest gains…

Or put another way…

“Team transitory” is dead
“Team no tantrum” is next

— zerohedge (@zerohedge) November 30, 2021

This is what it sounds like when doves die (and bears win)…

Tech outperformed in November while Energy and Financials were clubbed like a baby seal…

AAPL was the safe-haven today, dramatically decoupling from everything else…

Recovery stocks staged a modest comeback today as the worst fears of Omicron faded…

 

 

Powell’s comments today sent yields flying with the short-end screaming higher and long-end tumbling…

The massive yield curve flattening is shouting the market’s view that The Fed is on a path to a policy error…

5s30s are at their flattest since the COVID crash…

On the month, only the 2Y is higher in yield with the 30Y puking 15bps to its lowest level of the year…

Rate-hike expectations ripped higher on Powell’s comments…

The dollar was chaotic today, sliding on Omicron fears, exploding higher on Powell’s comments, then fading back into the red…

November was a big month for the dollar but this week’s weakness came at a very key technical level…

Turkish lira down 40% in the past 3 weeks. the start of hyperinflation

Brent Crude suffered its worst month since start of pandemic…

WTI crashed into a bear market (down 22% from Oct 26th high) with the biggest 5-day drop since its negative price collapse…

Which has sent Oil ‘VIX’ to its highest since Lehman (excluding the COVID collapse)…

ETH (+9%) dramatically outperformed BTC (-6%)  in November (so much for the post-Bitcoin-ETF surge)…

…pushing ETH to its strongest relative to BTC since 2018

The dollar strength in November did nothing to help commodities which aside from the carnage in crude, saw PMs and copper all in the red…

Finally, on top of all that chaos, a Hindenburg Omen has struck…

And it did not end well last time!