US equities suffered a big fall overnight with the Dow losing 710 pts to 25,446 and the S&P500 closing 2.59% lower at 3050. Market commentators were finding reasons for the fall notably the surge in COVID19 cases in the US as well as Biden's double digit gains over Trump in the polls. If there were the reasons, these were all known days earlier and it took the markets time to digest the ramifications - so much for efficient markets. Why are we not surprised to see the surge in pandemic in the US? Alan Kohler showed a chart that revealed that the surge in the cases were predominantly in Republican states while blue states were going down, but even that has changed with a rise in Californian cases and NY Cuomo ordering interstate visitor quarantine. Like I said, the market will respond to what POTUS does and does not do, and what he did was not adhering to or rather contravening safe social distancing rules by his election rallies and continuing to ignore science in the interest of his personal electoral interests.
FAANGM stocks were moderately lower but bank stocks were hit between 3-4% with the XLF down by 3.53%. Gold had a choppy trade overnight, it wasnt expected to surpass $1800 at first try and come back down when it failed, closing at $1772/oz better than what silver did. Gold stocks gave up some of the earlier gains with moderate losses ranging from 0.8-2.3% and GDX lower by 1.78% , on the back of a surge in the USD. On a bright note, gold in AUD was higher than yesterday at AUD2570 with the fall in the Aussie to 68.7c.
COVID-Comeback Batters Big-Tech & Black Gold, Sparks Bond Bidby Zero Hedge
Wed, 06/24/2020 - 16:00
Just when you thought it was safe to buy any stock - selected at random via Scrabble letters - on any dip, with levered money you can't afford to lose, COVID-19 reappears in size to steal the jam out of your donut.
Last Friday saw surges in COVID cases across many states and news that Apple would be re-closing stores in a handful of states. That sent stocks tumbling. Today - after a few days of exuberant dip-buying, those same states hitting new record highs (and more Apple store closures) sparked an even more impressive plunge (and was not helped by The IMF's downbeat forecast for the global economy)...
- 0905ET California COVID-19 cases rise 3.9% or +7,149 to 190,222 (up from +5,019)
- 0938ET Texas reported a 7.3% rise in Covid-19 hospitalizations to 4,389 from 4,092 yesterday.
- 1033ET *FLORIDA COVID-19 CASES RISE 5.3% VS. PREVIOUS 7-DAY AVG. 3.7%
- 1130ET *HOUSTON-AREA INTENSIVE CARE UNITS ARE AT 97% OF CAPACITY: CITY
- 1140ET *NEW YORK, N.J. AND CONNECTICUT ORDER VISITORS TO QUARANTINE
- 1400ET *CALIFORNIA HOSPITALIZATIONS UP 29% IN 14 DAYS, NEWSOM SAYS
- 1440ET *APPLE TO RE-CLOSE 7 STORES IN HOUSTON, TX ON COVID-19 SPIKE
All building on one another to slam stocks lower ending the 8-day win streak in Nasdaq (there was a late-day bounce on chatter of $1 trillion stimulus again but a $3bn MoC ruined that fun and games)...
And the result - a collapse below the Navarro lows, back To Friday's lows...
As Virus fears surge to one-month highs...
Source: BloombergThe S&P fell back towards its 50DMA...
And the Dow failed once again to break above its 50DMA...
Momentum continued its rabid bounce back today - after perfectly reversing at unchanged for 2020...
Source: BloombergThe dollar was bid today...
Source: BloombergTreasury yields tumbled 405bps at the long-end today...
Source: BloombergAre stocks about to catch down to bond's reality?
Source: BloombergOr profits...
Source: BloombergAnd while bonds saw safe-haven bids, bitcoin did not...
Source: BloombergAnd gold was monkeyhammered too around the London Fix (after failing to break $1800)...
But note that gold's tumble stalled at yesterday's fix...
Source: BloombergSilver was hit harder. busting back below $18...
Oil prices tumbled as COVID (demand) and inventory/production (supply) concerns smacked WTI back to a $37 handle...
Finally, we wonder just how far stocks will fall this time?
Source: BloombergAnd just how quickly The Fed will need to restart its money-printing malarkey...
Source: Bloomberg
