* WTI Crude jumped +3.47% to $71.30 as Iran rained ballistic missiles on Israel stoking a second tit-for-tat attacks between the two foes except that this time it may not be as shortlived as the previous ones; Iran must have calculated the repercussions for the retaliations
* Now we see a confluence of risk events - 1. Middle eastern war & higher oil price 2. US East coast dockworkers strike 3. Hurricane 4. Jobs report (Oct 4) that would test the resolve of the Fed and extent of their rate cuts as well as the resilience of the US economy
* Fertile ground for Gold/Silver and my recent modest entry into BBUS/BBOZ (for weekend money)
* Dow off -173pts, S&P500 -0.93% to 5708, Nasdaq -1.53% - most likely this could be the beginning of the Oct correction (a bad jobs number this Friday would cement it)
* Mag7 stocks suffered notable falls - NVIDIA -3.68%, AAPL -2.91%, MSFT -2.23%, Tesla -1.39%
* Gold up $28 to $2663 even as DXY scaled to 101.20 Strikes (Missiles & Dockworkers) Spark Surge In Oil, Gold, & Bonds; Big-Tech & Bitcoin Battered
by Zero Hedge
Wednesday, Oct 02, 2024 - 06:00 AM Today's mixed macro picture (construction spending down, National Manufacturing surveys and Dallas Fed in contraction offset by surge in JOLTS) was overwhelmed by Strikes (from Iranian missiles and American longshoremen).
The widespread union strike deadline passed and bond markets shifted lower in yield on that news overnight. Then as Iranian missiles rained down on Israel, investors poured into safe-havens (bonds, gold) and dumped stocks as oil prices re-discovered geopolitical risk premium. Source: Bloomberg
Treasury yields were all bid today, but are mixed on the week with the short-end significantly underperforming... Source: Bloomberg
Gold was also bid as safe-haven (erasing all of yesterday's losses)... Source: Bloomberg
The dollar strengthened significantly on the day (more safe haven flows perhaps)... Source: Bloomberg
Oil prices surged higher on the missile launches with WTI reaching almost $72 before pulling back a little. Source: Bloomberg
Stocks lurched lower on the Iran-Israel headlines - led by Small Caps and Mega-Cap Tech - but once Europe closed, the algos started trying to BTFD. The momentum did ignite but failed to get any of the majors green before some late-day profit-taking from 0-DTEs dragged everything down again...
VIX and VVIX both surged higher today... Source: Bloomberg
Bitcoin continued to serve its role as an anti-geopolitical risk asset - dumping every time a MidEast headline hits the Bloomberg terminal (which makes little to no sense to us... but hey we don't have PhDs)... Source: Bloomberg
It seems BTC and Big-Tech are joined at the hip again for now... Source: Bloomberg
Finally, as Bloomberg reports, while investors are focused on policy cues (and liquidity infusions), earnings momentum has turned negative and could be a drag on stocks if it doesn’t improve with the upcoming earnings season. Source: Bloomberg
Buy hey, for now liquidity is all that matters... Source: Bloomberg
...until it doesn't! And there's some liquidity stress in the banks' plumbing... Source: Bloomberg
Let's just hope it's quarter-end window-dressing (but this is one to keep an eye on). Is that why USA Sovereign risk is also spiking... Source: Bloomberg
