woensdag 21 juni 2017

Traders Panic Into 'Safe Haven' Biotechs As Crude, Credit And Yield Curve Carnage Continues

These are actual quotes from banks;
BofA: "markets are very weird"
JPM: "low vols will suffer catastrophic losses"
DB: "cataclysmic events are coming"
GS: "it will end in tears"
Citi:"expect markets to flounder as central banks try to exit"...


So today saw traders greatly rotating from energy stocks into the safe-haven of Biotechs...


Biotechs are up 8% in the last 3 days, the biggest jump since the election to Jan 2016 highs...


However, the attention was focused on oil. As WTI crashed to a $42 handle (lowest since August and RBOB trading to 139 lows (lowest since Nov)...


And Brent entered a bear market (down 24% from the Jan highs)...


This appears to be why...


Scales are different, indicative of trend only. Oil's demise is not just weighing on Energy stocks, credit is imploding to 7-month wides. For now the broad HY market is desperately ignoring it (but traded at least 100bps wider than this the last time energy risk was this elevated)...


But Nasdaq Futures were seemingly magically levitated in a straight line from around 430am ET, with VIX trading very strange; once again pushed back below 11...


On the day, Nasdaq was the biggest (and only) winner...


Nasdaq remains down 2% from pre-FANG crash closing levels...


As Energy and Retail Stocks have crashed in the last two days, only Healthcare (driven by Biotech) is green...


Even as FANG Stocks trod water again...


Treasury yields were mixed (short-end unch, long-end lower in yields)...


But once again the curve flattened, deeper into 2007 lows...


The Dollar Index ended the day modestly lower, stalling at the clifff edge from Payrolls...


Gold rallied modestly, testing back up to its 200-day moving average...


Finally, it appears the global deflationary collapse means everyone will advertise on Google, shop online, Netflix'n'Chill, or drive Teslas?