vrijdag 13 juli 2018

"Everyone Wins In A Trade War"; Stocks, Bonds, Dollar All Soar After Tariff Tantrum

"No one wins a trade war" they said. Well for now, everyone is winning, US, Chinese and European stocks are up; the dollar is stronger; the long-bond is up...


Bonds and Stocks are bid post-Trade-War-Tantrum...


For now Russia is winning the trade war (if stock markets matter)...


Chinese Stocks love Trade Wars...


European Stocks love Trade Wars (apart from Spain and Italy)...


US Stocks love Trade Wars...


Bloomberg offers a few explanations as to why the market seems unfazed by the trade war:
1. Investors are betting that cooler heads will prevail
2. The direct impact of tariffs is not enough to have drastic economic consequences. We are talking about 10% taxes on $200 billion imports in a $19 trillion economy. There will be winners and losers, but the aggregate impact is small
3. Political uncertainty matters less than you think...


And while uncertainty soars, VIX tumbled...


And then there's this, ignorance is bliss...


US equities had their best week in over a month as algos BTFTWD!! Small Caps ended the week red though...


S&P managed to get above 2,800...


Five opening short squeezes in a row...


Wells Fargo ended the week lower and Citi unchanged, but the "blockbuster" earnings this morning left bank stocks red on the day...


Yet again bank stocks have collapsed relative to the market and reverted back to the slumping yield curve...


An odd week for FANG stocks, lurch open on Monday morning and push to new record high, but Friday 13th spoiled the party...


Despite soaring stocks, the long-end of the bond curve ended unchanged...


And the yield curve collapsed to a new cycle low...


The yield curve collapse is accelerating...


30Y Treasury yield ended with the lowest weekly close since January...


The Dollar Index rallied solidly on the week...


The Yuan slid lower on the week once again (5th week in a row) finding resistance on a rebound twice at the CNY Fix...


Cryptos had another ugly week after a good start last weekend...


Commodities were all lower on the week...


The worst week since February for Bloomberg's Commodity Index but global stock markets don't care...