Markets Turmoil On Downed-Drone, Powell-Promises, And Trump-Tweets

Stocks up to record highs (Fed and Energy stocks), Bonds (price) up (Fed and Iran safe-haven), Gold up (Fed and Iran safe-haven), VIX up (hedging melt-up gains or levered longs), Dollar down hard (Fed uber-easy and no safe-haven bid?), and Rate-Cut Expectations soared...

Chinese stocks exploded higher overnight in the morning session (as policymakers hinted at more potential easing) but were flat in the afternoon session...

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Notably, China's bond yields are the only ones that are not making new cycle lows...

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European markets opened exuberantly but faded for most of the day (Spain was red on the day)...

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German bund yields fell back to record lows (-32bps) and most of Europe is now in a negative yield...

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And as yields tumbled, so did European bank stocks...

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US Equities surged overnight, opened at record highs (S&P), but were sold from the cash open, accelerating close to unchanged when Trump warned Iran "made a very bid mistake"... then after he seemed to walk back the event, stocks recovered some of their gains...

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NOTE - remember tomorrow is a quad witch

“We are inclined to believe it has more to do with tomorrow’s quadruple expiry in futures and options markets than a true shift in investor sentiment,” said Russ Visch, a technical analyst with BMO Capital Markets.

“The quality of the rally since late May (narrow participation, extremely light volume) suggest it’s nothing more than a relief rally within an ongoing medium-term downtrend,” he said.

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The S&P 500 hit a new all-time intraday high at the open...

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NOTE - Previous S&P intra high 2954.13, close high 2945.8)

Late-day buying panic was sparked by all that pre-expiration gamma again...

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Cylicals were bid today, catching up to yesterday's defensive-driven outperformance...

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US Bank stocks continue to notably underperform as yields collapsed...

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Slack slumped...

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TSLA stalled at key downtrend despite market strength...

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Despite the equity gains, VIX ended the day higher...

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The jaws of death widen...

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Treasury yields tumbled...

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With 10Y Yields plunging below 2.00%...

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And 2Y yields failed to bounce at all today...

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The dollar was dumped - the biggest two-day drop since Feb 2018...and DXY back below the 97.00 level...

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Yuan has strengthened notably, trading stronger than the CNY fix for the first time since April

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Cryptos were mixed with Bitcoin gains, Litecoin and Ripple fading...

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Bitcoin surged back up toward $9500 (highest since May 2018)

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Commodities were all higher on the day but Iran dowing a US drone sparked a huge spike in oil...

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Gold soared up near $1400 overnight, fell back, then accelerated higher once again as US-Iran headlines hit...

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This was Gold's biggest day since Oct 2018, spiking to its highest since 2013...

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Gold in Yuan is at its highest since April 2013...

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Oil prices exploded higher (biggest day since 2018) on the US-Iran headlines... (this is the biggest 3-day spike since Dec 2016)

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Finally, US (and Europe) markets' expectations for central bank rate-cuts have collapsed to cycle lows (52bps of cuts in 2019 and 86bps of cuts by the end of 2020)...

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