Slow motion trainwreck…
No National Team last night in China…
European stocks ramped at the open (extending the little bounce at the China close) then drifted lower as EU closed (which then plunged in US markets)…
After a ‘strong’ open, everything collapsed after US-China trade headlines (but FANGs were down hard before that reportedly on EU Digital Tax headlines)…BTFD algos steeped in into the close…
But US futures show the excitement better as they ramped to Friday’s highs ahead of the open…ran the stops, then collapsed…
The Dow and S&P fell back into the red YTD and Nasdaq is now only up 1.4% YTD…
From their highs, all major US equity indices are in correction:
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Dow -10.1%
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S&P -10.8%
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Nasdaq Composite -14.4%
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Dow Transports -15.5%
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Russell 2000 -15.5%
All below critical trendlines and 200DMA…
Dow futures fell 900 points from their highs!
One look at TICK data and it’s clear the 2pm Panic is here…
But there was a massive sell program towards the close…
This was the second biggest sell climax since May 2010’s Flash-Crash…
VIX spiked above 25 and the VIX term structure is inverted for the 16th day in a row…
VIX Futures are above 20 all the way out to June 2019… The following chart shows the evolution of the VIX term structure from the start of the month to the end…
FANG stocks were hammered today, puking to six-month lows…down 24% from highs
Led by AMZN and NFLX who crashed over 7% as the UK Digital Tax was blamed (but it seemed a lot more systemic than that)…
All FANGs are now in a bear market:
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FB -35.5%
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AMZN -25.9%
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NFLX -33.3%
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GOOGL -20.3%
Semis were also hammered – now down 22.5% from their highs to 13-month lows…
High Yield credit is starting to crack…
Treasury yields ended marginally higher after a big overnight sell-off saw a bid return as stocks got slammed in the afternoon…
And Treasury vol spiked to near 8-month highs…
The Dollar Index spiked all the way to Friday’s highs then chopped around…
The Brazilian Real surged at the open after Bolsonaro’s win and relief that the socialists lost, but that was quickly unwound as the currency collapsed 12 handles from high to low…
Offshore Yuan tumbled – despite a stronger Yuan fix – extending losses after US-Chin atrde war headlines – to its lowest close since Dec 2016…
Cryptos tumbled on the day, not helped by a double whammy from the UK with a Digital Services Tax and FCA confirming talk of UK banning the retail sale of crypto derivatives…
Dollar strength weighed on the broad commodity space with Silver getting hit hardest
Silver’s drop was significant breaking below its 50DMA with a sizable drop…
One chart fascinated us today, via Bloomberg’s Richard Jones, the S&P earnings yield premium to 10Y Treasuries has been somewhat glued to the Fed Funds rate for the last few months…
Finally, it appears hedge funds were anything but ‘hedged’ in October…
Moo…
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