Shart Of The Deal – Stocks & Bond Yields Puke On Trump ‘No Stimulus’ Tweet

Shart Of The Deal – Stocks & Bond Yields Puke On Trump ‘No Stimulus’ Tweet

Tyler Durden

Tue, 10/06/2020 – 16:00

Just when you thought it was safe to buy the reflation trade with both hands and feet, Trump takes his ball and refuses to play with Democrats’ demands for state bailouts.

Nancy Pelosi is asking for $2.4 Trillion Dollars to bailout poorly run, high crime, Democrat States, money that is in no way related to COVID-19. We made a very generous offer of $1.6 Trillion Dollars and, as usual, she is not negotiating in good faith. I am rejecting their request, and looking to the future of our Country.

I have instructed my representatives to stop negotiating until after the election when, immediately after I win, we will pass a major Stimulus Bill that focuses on hardworking Americans and Small Business.

I have asked Mitch McConnell not to delay, but to instead focus full time on approving my outstanding nominee to the United States Supreme Court, Amy Coney Barrett. Our Economy is doing very well. The Stock Market is at record levels, JOBS and unemployment also coming back in record numbers.

We are leading the World in Economic Recovery, and THE BEST IS YET TO COME!

Which prompted this reaction in stocks…

Or put another way…

Small Caps were soaring relative to mega-Tech for most of the day until the Trump tweet reversed things… but its notable where the relative level was when it reversed…

S&P broke below its 50DMA, Dow and Nasdaq also pushed down to that key technical level…

Critically, the S&P failed around its key gamma level at 3410…

Some notable levels below here…

Airlines crashed…

Source: Bloomberg

Banks were battered…

Source: Bloomberg

FANGs fubar…

Source: Bloomberg

Growth and Value were both whacked…

Source: Bloomberg

Cyclicals were hammered…

Source: Bloomberg

Panic hit retail…

Which prompted Dave Portnoy to explains why traders should “buy the dip.”

Bond yields immediately plunged

Source: Bloomberg

10Y dropped back below 75bps…

Source: Bloomberg

Real Yields were notably higher on the day until the Trump tweets hit…

Source: Bloomberg

The Dollar spiked…

Source: Bloomberg

Gold futures fell back below $1900..

Silver was slammed back below $24…

Sending Gold/Silver back above 80x…

Source: Bloomberg

Oil prices did drop on the ‘no stimulus’ tweet but remain higher on the day, bouncing off $40…

Finally, one has to wonder what happens to the excited upgrades of EPS expectations if there’s no new bailouts…

Source: Bloomberg

Powell was desperately pleading for more fiscal stimulus this morning once again…

Perhaps this is why – he has realized that the liquidity delusion has finally stopped working…

Source: Bloomberg

Go to Source
Author: Tyler Durden

Comments