"Growth Scare" - PMIs in Japan, Europe, and the US all collapsed and risk-asset markets are suddenly waking from their delusions.

Well that escalated quickly...

WTI Crude crashed to a $57 handle (its worst day of 2019)...

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US equities suffered after Huawei headlines signaled US-China trade tensions are escalating fast (and a base-case 'deal' is disappearing). "Trade War"-related stocks have given up over half their post-December-collapse gains...

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And as, Bloomberg's Sarah Ponczek notes, investors haven’t been this keen to short the U.S. stock market since the Federal Reserve started raising interest rates.

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Short interest as a percentage of shares outstanding on the SPDR S&P 500 ETF Trust, or SPY, climbed as high as 7% this week, according to data from IHS Markit Ltd. That’s the highest share since 2015, when the benchmark gauge for American equities slipped into a correction as Fed officials began boosting rates from near zero.

“There are some clouds forming on the horizon,” said Matthew Litfin, a money manager at Columbia Threadneedle Investments. Besides the U.S.-China dispute, “you also can’t really have this Goldilocks thing that we’re in, where the economy is pretty good and the Fed’s seen to be easing. The Fed doesn’t feed the fire, the Fed takes away the punch bowl. They don’t refill the punch bowl at the party,” he added.

China was ugly overnight as Huawei headlines hit...

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Europe was ugly, not helped by dismal confidence and PMIs in Germany...

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And US equities were a bloodbath with tech wrecking once again...Trannies are the worst on the week, and The Dow is outperforming (though all are red on the week)...

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Of course, it wouldn't be 'Murican free markets without a panic-rescue-bid (on no headlines whatsoever) into the close...

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This was the biggest buy program in over a week at 3:20 pm ET (after the biggest sell at the open since January)...

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The Dow closed below its 200DMA for the first time since January...

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Small Caps plunged to their lowest since January...

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This is the biggest two-day drop in "Most Shorted" stocks since the Dec 24th lows...

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Semis were down once again (down almost 19% from highs)

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And overall tech stocks wrecked...

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Real Estate overtook Tech as the best performing sector...

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Before we leave equity land, this stunning chart from Bloomberg strategist Cameron Crise exposes the odd regime shift of the last few weeks... Day after day, we see overnight selling pressure, only to be bid back at the cash open. One could be forgiven for thinking the trade war is being played out between The Plunge Protection Team and The National Team battling to show how trade tensions are not affecting their stock markets. Think we're crazy?

The US stock markets are sliding as investors fear over China-US trade war. The real situation could be even worse. The only room left for manoeuvre is the leaders of the two countries still maintain personal respect for each other.

— Hu Xijin 胡锡进 (@HuXijin_GT) May 23, 2019

But, as Crise notes, these huge opening down gaps are pretty clearly a sign of trouble, and we're now at the point that we've exceeded anything observed during the crisis...

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Credit and equity protection costs spiked today (with HY most notably weaker)...

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Treasury yields tumbled on the day...

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Across the curve this was new cycle lows for yields (5Y and 30Y lowest since Dec 2017, 10Y lowest since Nov 2017, 2Y lowest since Feb 2018)...

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The 10Y Yield plunged below 2.30%!!

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The yield curve crashed back into inversion...

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Markets have seen the biggest two-day drop in 5-10 year inflation expectations since mid-2017, based on futures contracts...

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And inflation swap caps/floors say 'no way' to headline CPI > 2.0% YoY for next 2-7 years...

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Finally, before we leave rates-land, market expectations for 2019 Fed rate actions have collapsed to a stunning 46bps rate-cut expectation...

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The DXY Dollar Index shot up overnight to fresh 24-month highs, and then plunged...

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Cable ended very marginally lower (after bouncing hard off 1.26 the figure)...

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Cryptos were down modestly on the day, after plunging overnight and recovering once US market liquidity arrived...

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Silver continues to lead the week, with crude collapsing...

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Gold jumped against the yuan (and dollar)...

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Finally, some food for thought from Gluskin-Sheff's David Rosenberg...

Look at this chart of major appliance shipments – collapsing 17% YoY in April – and tell me we aren’t heading into a recession. pic.twitter.com/dwKzt7u8SX

— David Rosenberg (@EconguyRosie) May 23, 2019

As @MikaelSarwe asked earlier, are we seeing a similar breakdown of various "leading" market-based indicators as last summer, before the equity market crash in Q4?

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Probably nothing... "transitory"?