"Not Off The Lows" – Oilmageddon Sinks Stocks As Treasury Curve Crashes To 10-Year Lows

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Tough day for some…

 

A bloodbath in the oil patch as WTI entered a bear market, hit a $42 handle and tumbled to the lowest levels since Nov 2016…

 

That weighed on Trannies the most but selling pressure was abundant… and the absence of dip-buyers was clear (as central bank balance sheet shrank modestly)

Small Caps and Trannies are red from Friday now. Trannies biggest drop in a month

And energy stocks more broadly…

 

VIX dared to rise above 11, as Nasdaq erased yesterday’s opening panic bid ramp

 

But once again FANG stocks opened higher and drifted lower, unable to break above the 50% retracement level…

 

While oil was making the headlines,  the yield curve was collapsing even more historically…

 

2s10s continues to tick flatter…

 

5s30s are now at its flattest since 2007…

The same flatness when the last two recessions started…

So now we have:

  • KAPLAN: SHAPE OF THE YIELD CURVE IS SOMETHING THAT WORRIES ME

But…

  •  NY FED’S DUDLEY: FLATTENING YIELD CURVE IS NOT A BAD SIGN FOR THE ECONOMY

At least get your story straight!!

The Dollar Index rallied once again – erasing the losses post-Payrolls…

 

WTI hit a $42 handle, below the May lows…

 

And gold futures held below their 200-day moving average…

 

Finally, as Citi notes, buy the dips when central banks are adding liquidity. Don’t buy them when they’re pulling back – as at present 

 

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