So much for the "broadening out of the rally" bullshit!
Semis were slammed - their biggest drop since the COVID lockdowns - as the market had trouble with weaker than expected 3Q guidance from European semi bellwether, ASML (and headline chatter of further crackdowns on chip exports to China)
Source: Bloomberg
The Nasdaq damn broke today as it suffered its biggest single-day drop since Dec 2022...
Source: Bloomberg
Small Caps actually had a down day today (though outperformed Nasdaq) as The Dow hit a new record high...
The last five days have seen Small Caps (Russell 2000) outperform Large Caps (Russell 1000) by the largest amount in history (going back to 1979)...
Source: Bloomberg
The Magnificent 7 stocks have lost a staggering $1.1 Trillion in market cap in the last five days...
Source: Bloomberg
But that's still a drop in ocean in context of how far they have come...
Source: Bloomberg
Under the hood, Goldman's trading desk noted that volumes +17% vs the trailing 20 days and can feel it flow-wise on the desk. S&P top of book tracking much higher as well +11%. Our floor is skewed much better for sale (-8%) with most moving their feet in TMT. Across Semis, we have seen significant supply most concentrated in AI winners. We have also seen supply across rideshare names (UBER, LYFT) + ADRs.
LO activity concentrated in tech, followed by Hcare but slow elsewhere.
HFs also moving their feet in tech, but also active across Consumer Discretionary on the buy side, vs selling Fins, and Hcare. Short ratios elevated across staples.
For context, in cumulative notional terms, the de-grossing activity over the past 5 sessions is the largest since Nov '22 and ranks in the 99th percentile on a 5-year lookback...
Dovish comments from Fed's Waller were largely ignored - though did provide some juice for the initial short squeeze on Small Caps at the cash open...
Source: Bloomberg
Treasuries were mixed today with the long-end very modestly outperforming overall (2Y +1bps, 30Y -1bps). Weakness overnight gave way to a strong bid during the US session as equities sold off...
Source: Bloomberg
Rate-cut expectations remained dovish with 2025 expectations rising today...
Source: Bloomberg
The dollar tumbled further below June Payrolls lows today, back near two-month lows...
Source: Bloomberg
Much of the dollar weakness was the further implosion of the yen carry trade (which strengthens the yen vs the dollar)...
Source: Bloomberg
Crude prices soared today, helped by a big inventory decline...
Source: Bloomberg
Bitcoin ETFs continued to see stronger inflows...
Source: Bloomberg
But bitcoin was weighed down modestly today by the overall tech turbulence (notably strong relative performance though)...
Source: Bloomberg
Gold dipped back from record highs but spot found support at $2450...
Source: Bloomberg
Finally, if you thought you had a bad day in the markets, President Biden's odds of getting the nomination collapsed... again...
Source: Bloomberg
Kamala's awful quiet, eh?
