Global Bonds & Stocks Suffer Biggest Rout To Start A Year Since 1999

2024’s tumble in stocks and bonds was the biggest global rout to start the year since 1999 (and yesterday was the biggest daily drop in global capitalization since Dec 2022)…

And while stocks and bonds tanked, the dollar soared…

Source: Bloomberg

The dollar has not fallen at the start of a calendar year since 2012, but the start of 2024 is the biggest rally since 1997…

And the trend of weak economic data continues with ISM Manufacturing in contraction (below 50) for the 15th straight month, and JOLTS data confirming cracks starting to appear in the labor market…

Source: Bloomberg

The FOMC Minutes today were significantly less dovish than the market (and Jay Powell) suggested and March rate-cut odds faded modestly…

Source: Bloomberg

No bounce at all in stocks after yesterday’s ugliness is putting the weekly win streak at risk of ending at nine. Small Caps were clubbed like a baby seal today (down almost 3%) and Nasdaq extended yesterday’s loses (down around 1% today). The Dow remains the least ugly horse in 2024’s glue factory…

MAG7 couldn’t catch any bid at all today…

Source: Bloomberg

And ‘most shorted’ stocks puked at the open and didn’t bounce/squeeze at all…

Source: Bloomberg

S&P is down for the first two days of the year for the first time since 2015 and suffered the worst return start to a year since 2019 (which was after the end-2018 crash that Powell rescued stocks from)…

The Russell 2000 has crashed back to a critical level (its 21DMA), down over 5% from its highs last week…

Source: Bloomberg

Goldman noted that US equities were only rescued yesterday by a large BUY imbalance on the close (which seemed to suggest retail/household $ deployments into the market to start the year)…

Source: Bloomberg

And one more tidbit before we move on to bond-land, healthcare dramatically outperformed MegCap Tech by the second most in the last 12 months…

Source: Bloomberg

Treasury yields tumbled in the afternoon as IG issuance dried up and rate-locks were lifted. On the day the belly outperformed (5Y-10Y -2bps) which left the 2Y yield just a smidge higher on the week…

Source: Bloomberg

10Y Yield tested above 4.00% but quickly fell back. That is a 10bps plunge intraday fore the 10Y yield…

Source: Bloomberg

Perhaps today’s most notable market mover was crypto which saw a significant flash-crash around 0630ET, led by a 7% plunge in Bitcoin, from $45,500 to $41,000 before bouncing back…