Cryptos made all the headlines today as they pumped and then super-dumped around a narrative of El Salvador ‘sell the news’ chatter (and IMF, BIS, and World Bank disappointment that the South American nation dared to edge away from their fiat-uber-alles world)…
Source: Bloomberg
Interestingly, through the last few weeks since El Salvador unveiled its plans to adopt Bitcoin as legal tender, the market’s perception of the nation’s credit risk has improved significantly…
Source: Bloomberg
A little context for today’s move in bitcoin is perhaps worthwhile… (Bitcoin fell from just below $53,000 to just below $43,000 today, but is still up over 50% since El Salvador first floated the idea in early June)…
Source: Bloomberg
It felt a little like this for a while today…
But then the El Salvadorean president stepped in along with a few others to buy the engineered dip…
Source: Bloomberg
Equities were also dumped today with Nasdaq the only major index to manage gains from Friday. The Dow was the worst performer, followed by Small Caps. NOTE that US futures sold off like clockwork at the cash open yesterday BUT the cash market was closed!…
The Dow pushed down to near 3-week lows, testing towards its 50DMA…
AAPL rallied to yet another new record high (with a market cap of over $2.60 trillion). NOTE – AAPL first crossed the $1 trillion in August 2018…
Source: Bloomberg
Defensives took a beating today, erasing last week’s outperformance; but cyclicals were also sold today…
Source: Bloomberg
Treasuries were also sold today, relatively evenly around +4bps across the curve (2Y outperformed)…
Source: Bloomberg
Notably, 10Y Yields tagged last week’s high yield stops and stalled…
Source: Bloomberg
The Dollar had its best day in over 3 weeks today after treading water yesterday during the Labor Day break…
Source: Bloomberg
Gold was also hit today along with everything else, trading back below $1800…
And oil was also sold today, with WTI testing below $68 briefly…
Finally, Goldman Sachs points out that the US Financial Conditions Index eased by 4.8bp to an all-time low of 96.94 over the last week. In other words, the market (and economy presumably) has never, ever faced an ‘easier’ policy setting. There’s just one thing…
Source: Bloomberg
For over a year, US financial conditions have done nothing but get easier and easier and actual US economic data has done nothing but get worse and worse than expectations.
