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Powell, Pelosi, & Pentagon Pummel Big-Tech, Bonds, & Bullion
Tyler Durden
Thu, 08/27/2020 – 16:01
Fed Chair Powell’s initial comments spiked stocks:
*POWELL SAYS FED TO SEEK INFLATION THAT ‘AVERAGES’ 2% OVER TIME
…then ‘moderation’ sent them reeling:
*POWELL SAYS ANY INFLATION OVERSHOOTS WILL BE MODERATE
but he later reassured that they would let inflation run and things took off again…
*POWELL: SEEK TO RUN INFLATION ABOVE 2% AFTER PERIODS BELOW 2%
Then Pelosi triggered a drop in stocks (hitting right as Europe closed)…
1129ET *PELOSI SAYS NOT BUDGING ON STIMULUS, REPUBLICANS HAVE TO MOVE
This didn’t help!
1315ET *Kaplan: Markets Need to Understand How to Operate Without Fed Support
And then Pentagon headlines spooked markets a little late on…
1420ET *CHINA MILITARY SAYS U.S. WARSHIP EXPELLED NEAR PARACEL ISLANDS
And then Pelosi again…
1515ET *MEADOWS-PELOSI TALK DOESN’T APPEAR TO YIELD BREAK-THROUGHS
1530ET *PELOSI SAYS SHE IS STICKING TO HER DEMANDS ON STIMULUS
And in the end The Dow notably outperformed as Nasdaq swung around desperately trying to stay green but failed…
The Dow’s big mission was get back to even on the year…
Source: Bloomberg
28,538 was the magic number (green YTD) but the machines failed to hold it…
But there’s a growing chasm between winners and losers…
Source: Bloomberg
But Big-Tech stocks ended lower (after yesterday’s meltup)!!
Source: Bloomberg
“Inconceivable!”
Across the asset classes the volatility was similar (from the Powell headline drop)…
Bonds definitely suffered most…
Source: Bloomberg
with 10Y Yields (which fell immediately after Powell spoke) soaring to 2-month highs…
Source: Bloomberg
And 30Y TSY yields hitting 1.50% for the first time since June…
Source: Bloomberg
Breakevens initially plunged before taking off to its highest since January…
Source: Bloomberg
Real Yields increased (back below -1.00%)…
Source: Bloomberg
Gold ended the day lower despite Powell’s “money printer go brrr” speech but after a big pump and dump…
The dollar mirrored gold, dumping on Powell’s initial comments but then rocketed higher…
Source: Bloomberg
Cryptos were sold today…
Source: Bloomberg
Gold is down on the week as copper leads…
Source: Bloomberg
Oil prices fell, unable to scramble back above $43…
Finally, some context for today’s move in bonds…
Source: Bloomberg
And one wonders what message VIX is sending? Everyone levered long calls or is this protection-overlays beginning?
Source: Bloomberg
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