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Dow Suffers First Post-Trump Loss As Cratering Bond Curve Bruises Banks

Wednesday, November 16, 2016 14:55
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Headline: Bitcoin & Blockchain Searches Exceed Trump! Blockchain Stocks Are Next!

Industrial Production contracts for longest non-recessionary period ever, GDP growth expectations are dead on the floor, and rate-hike odds are near 100%…

The Dow closed red as Nasdaq surged… (not teh drop towards the end of day sparked by Carl Icahn’s comments that “stocks have run ahead of themselves since Trump won the election”

But Nasdaq remains red from pre-Trump…

Tech gained the most today (as losers become winners) and financials were the laggards…

VIX briefly popped above 14 at the US cash open but faded all day…

Breadth remains dismal..

Small Caps – by far the most sensitive to credit conditions historically and fundamentally – have entirely decoupled from high yield bonds…

30Y yields are now lower on the week, but obviously remain higher post-Trump for now…

Perhaps even more worrisome for the Trumpflationists is the fact that the US Treasury curve has flattened drastically – now 3bps flatter post-Trump…

Which is starting to weigh on financials…

As stocks begin to realize that credit markets were right after all…

And finally, if banks are such ‘no brainer’ buys… why are traders panic-buying protection (implied vol just hit 5-month highs)…

Notably China’s Offshore Yuan has crashed to a fresh record low and decoupled from the bid for US Treasury bonds…

And as Yuan weakens so Bitcoin spiked up…

The US Dollar Index broke out today to its highest since 2003… tracking rate-hike odds almost perfectly…

WTI gave up its OPEC-headline-driven ramp gains, waking up to the reality of surging inventories…

Bonus Chart: LOL! That’s not how it’s supposed to work!

Charts: Bloomberg


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