‘Growth’ Gains, ‘Value’ Pains As Yields Plunge, Dollar Jumps, Crude Dumps

As America came back to work after celebrating (are we allowed to say that nowadays) Independence Day, Beijing had a surprise in store with its very visible hand stomping on China tech stocks.

China’s three storms arrive – military threats (Taiwan and South China Sea), geopolitical threats (BRI Funding ‘capture’), financial threats (currency devaluation, overseas investment control, and tech crackdowns)…

DIDI dived below its IPO price…

And Nasdaq’s Golden Dragon Index continued its crash…

Source: Bloomberg

That anxiety rolled over into US markets with a heavily-shorted bond market…

Feeling some serious short-squeeze pain as Services surveys crashed…

Source: Bloomberg

Smashing 10Y yields back below 1.40% and the lowest since February…

Source: Bloomberg

And 30Y yields crashed below 2.00%…

Source: Bloomberg

Pushing the long-end yields down to their lowest levels since February…

Source: Bloomberg

The plunge in yields sparked more rotation into growth over value…

Source: Bloomberg

Which prompted a pukefest in Small Caps (and bid for big-tech) at the open. The extent of the selling pulled Nasdaq down but headlines on AMZN/MSFT and JEDI sparked the standard BTFD panic around 1230ET. Small Caps were the wekaest

The S&P was on a 7-day fresh ATH close streak (which had only happened 5 times in history)… that streak is now over!

Today’s moves erased all of Russell 2000’s gains relative to Nasdaq year-to-date…

AMZN soared today on the JEDI news and MSFT was weaker…

VIX went full K2 today, surging higher to almost 18 before crashing back to almost 16 (though did end higher on the day after Friday’s payrolls plunge)…

The dollar surged as bond yields plunged along with stocks, erasing Friday’s post-payrolls plunge…

Source: Bloomberg

Cryptos chopped around over the long weekend with Bitcoin rallying up to $36k on Sunday and down to almost $33k yesterday before rebounding today…

Source: Bloomberg

WTI soared as “no deal” sparked bullish sentiment on no production increase but the anxiety of a broken cartel and prisoner’s dilemma game theory prompted heavy selling pushing WTI back from $77 highs to a $72 handle at the lows…

Gold has retracted around half of its post-FOMC spike lower, rallying today, despite the surge in the dollar…

Finally, is it time to buy gold for the seasonals?

Source: Bloomberg

And ‘soft’ data is finally catching down to the ugly ‘hard’ data…

Source: Bloomberg

We’re gonna need more stimmies!