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Geopolitical Chaos Slams Stocks As Traders Flood Into Safe-Havens

With ‘everyone’ on vacation, geopolitical chaos drove risk-off today

  • China trade war

  • Hong Kong revolt

  • PLA buildup

  • German recession

  • Italeave

  • Epstein farce

  • Argentina’s ARS pounded

  • Kashmir chaos

  • Russian nuke explosion

  • Iran tanker safari

Sending gold above stocks for the year…

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Source: Bloomberg

And since Powell’s “mid-cycle adjustment”, gold and bonds are the big winner…

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And on the day, investors dumped the broad market while piling into Bonds, Bullion, and BYND as safe-havens…

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Source: Bloomberg

Chinese stocks were miraculously bid today (after some brief selling in the early afternoon session, stocks soared as HK tensions escalated)…

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Source: Bloomberg

A positive open in Europe did not end well…

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Source: Bloomberg

New record low close for Bund yields…

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Source: Bloomberg

Crushing European Banks to a critical support level…

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Source: Bloomberg

And US equities were all lower on the day (led by Trannies)…

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CNBC Anchor: “Equity markets have picked up a bit, now down just 430 points”

Bagholder On CNBC: “…we don’t want to sell, we are long term investors.”

Seems like the Fib 61.8% retrace was the hard limit for the short-squeeze dead-cat-bounce…

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All the major US equities broke back below key technical levels…

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Eerily echoing 1998’s performance…

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Source: Bloomberg

VIX topped 21 intraday, and judging by 2s10s, has a long way to go…

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Source: Bloomberg

Stocks and bonds remain decoupled

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Source: Bloomberg

Treasury yields reverted back to collapsing today (led by the long-end)…

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Source: Bloomberg

10Y Yields dropped to lowest since Sept 2016…

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Source: Bloomberg

And 30Y is within a tick of record lows (2.09% on 7/8/16)…

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Source: Bloomberg

The yield (2s10s) plunged to fresh cycle lows…

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Source: Bloomberg

And 3m10Y is not at its most inverted since April 2007…

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Source: Bloomberg

And in case you wondered how bad it could get, 5-year-forward 10Y yields plunged to a new record low…

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Source: Bloomberg

 

Argentina was a bloodbath after Macri’s dismal showing in the primaries…

The peso crashed 25%…

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Source: Bloomberg

And bond prices collapsed…

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Source: Bloomberg

Yuan slid modestly weaker (after 8th straight day of weaker fixes)

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Source: Bloomberg

Hong Kong Dollar drifted back towards the low-end of the USDollar peg band…

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Source: Bloomberg

Cryptos are mixed since Friday after the overnight crash on Saturday morning (Bitcoin hovering around $11500)…

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Source: Bloomberg

 

Copper was worst as crude managed to scramble back to breakeven but PMs were best…

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Source: Bloomberg

As stock losses accelerated, gold (and silver) spiked higher…

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With bund yields hitting new lows, gold will be pressured higher as having more yield than over $15 trillion of global bonds…

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Source: Bloomberg

WTI bounced up to test $55…

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Elsewhere in commodity-land, Iron Ore continues to crash…

  • DCE Iron Ore Spot index declines 9 days in a row.

  • Iron Ore futures -5.1%, low 609.5 RMB, 607 limit down

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Source: Bloomberg

And Chicago Corn crashed most since 2013 as official corn-planting estimates exceeded analyst expectations.

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Source: Bloomberg

 

 

Finally, as Gluskin-Sheff’s David Rosenberg noted: “For all the excitement and jubilation as one high followed another, courtesy of stock buybacks for the most part, the reality is that the S&P 500 isn’t even 1% above where it was on January 26th, 2018. More than a year-and-a-half of nothing … except the dividend, that is.”

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And for now, the market-implied odds of a trade deal saving the world are around 12%…

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And so…

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And…

 


Source: zerohedge.com

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