Stocks, Bond Yields, & Crude Tumble As ISM Peaks & Fed Speaks

The all-important (when it’s rising) Manufacturing ISM survey (green line) fell to its lowest of 2021, with the ‘soft’ survey data starting to catch down to ‘hard’ data’s reality (red line)…

Source: Bloomberg

This prompted a plunge in Treasury yields…

Source: Bloomberg

This sparked a plunge in the 10Y to a 1.14% handle, before the European close, which sparked some bond selling…

Source: Bloomberg

Stocks were all lower on the first day of the month (after futures front-ran the inflows before the bell). Fed’s Waller warned in the last hour that if we get good jobs data in the next two months then The Fed will “taper early and fast” and would “taper MBS faster” which spooked stocks a little…

“I think you could be ready to do an announcement by September,” Waller said Monday in an interview on CNBC.

“That depends on what the next two jobs reports do. If they come in as strong as the last one, then I think you have made the progress you need. If they don’t, then I think you are probably going to have to push things back a couple of months.”

“If the jobs reports come in as I think they’re going to in the next two reports, then in my view with tapering we should go early and go fast, in order to make sure we’re in position to raise rates in 2022 if we have to. I’m not saying we would.”

Stonks did not like that…Nasdaq outperformed on the day as Small Caps lagged…

You have been warned…

There were chaotic swings in Nasdaq vs Small Caps at the open as the algos ran the stops once again…

Cyclicals were well bid the open but gave it all up by the close…

Source: Bloomberg

Materials stocks underperformed as Utes rallied (energy stocks spiked at the open, then dumped as the short squeeze failed)…

Source: Bloomberg

German 30 yields tumbled back below 0 for the first time since Feb 5th…

Source: Bloomberg

Which is sending global negative-yielding debt soaring once again (back above $16 trillion, and signaling higher gold prices to come)…

Source: Bloomberg

US Real yields hit a new record (negative) low…

Source: Bloomberg

Cryptos were mixed with Ethereum up strongly since Friday and Bitcoin down modestly (chatter on the new infrastructure bill’s crypto taxation plan spooked some)…