Stocks & Bonds Sluggish In Post-Holiday Hangover; Black Gold, Bitcoin, & Bullion Battered

After a long-ish July 4th weekend, some liquidity returned today but activity levels were relatively flat compared to the last two weeks.

Goldman's trading desk noted they were tilted slightly better to buy:

  • LOs are +6% better to buy with demand for Energy, Cons Disc and Mats outweighing supply in Tech, Staples & Comm Svcs

  • HFs are +4% better to buy with demand in HCare 2x larger than Industrials, driven by covering.  Every other sector’s net $ skew is +/-$30mm with demand in Cons Disc, Energy, Utes, REITs & supply in Comms Svcs, Fins, Tech & Staples

The cash open saw some chaos with The Dow and Small Caps immediately panic bid but heading into the European close, those excited gains sold off and everything but Small Caps fell back into the red...

stocks bonds sluggish in post holiday hangover black gold bitcoin bullion battered

The best example of the chaos was in "most shorted" stocks which squeezed bigly at the open, then oscillated back and forth before fading back as Europe closed...

stocks bonds sluggish in post holiday hangover black gold bitcoin bullion battered

Source: Bloomberg

The 'Energy vs AI' trade swung back in AI's favor today as Tech outperformed and Energy stocks lagged...

stocks bonds sluggish in post holiday hangover black gold bitcoin bullion battered

Source: Bloomberg

The massive (record) long gamma is tamping down all volatility...

stocks bonds sluggish in post holiday hangover black gold bitcoin bullion battered

Source: Goldman Sachs

...as Goldman noted today's very tight range-bound session, with the SPX intraday band just 26bps, but under the surface there are clear signs of Low Momentum strength driven by cover demand coupled with continued inflows into Mag7...

stocks bonds sluggish in post holiday hangover black gold bitcoin bullion battered

Source: Bloomberg

Treasuries were mixed but also traded in a very narrow range with the long-end outperforming modestly (2Y +2bps, 30Y -2bps)...

stocks bonds sluggish in post holiday hangover black gold bitcoin bullion battered

Source: Bloomberg

The dollar was well and truly in the doldrums today, barely managing to show signs of life...

stocks bonds sluggish in post holiday hangover black gold bitcoin bullion battered

Source: Bloomberg

Crude prices tumbled back towards $82 (WTI) from $84.50 highs late Friday...

stocks bonds sluggish in post holiday hangover black gold bitcoin bullion battered

Source: Bloomberg

Crypto was chaotic too; dumping overnight back near $54,000, then panic bid all the way above $58,000 into the European session and then dumping back to $55k during the US session...

stocks bonds sluggish in post holiday hangover black gold bitcoin bullion battered

Source: Bloomberg

Friday's post-payrolls pump in gold was dumped today, back into July 4th's range...

stocks bonds sluggish in post holiday hangover black gold bitcoin bullion battered

Source: Bloomberg

Finally, with the record long gamma comes the (almost) record low realized volatility...

stocks bonds sluggish in post holiday hangover black gold bitcoin bullion battered

Source: Bloomberg

Somewhere, Minsky is turning in his grace at the lack of concern and quiet complacency... that's slowly building the ammo for a 'Moment'.

Authored by Tyler Durden via ZeroHedge July 8th 2024