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Fed Liquidity Drain Spoils Virus-Surge-Inspired Stock Buying-Panic

DATE POSTED:February 13, 2020
Fed Liquidity Drain Spoils Virus-Surge-Inspired Stock Buying-Panic

The US equity market has gone full-Rick-Astley...

And everyone knows you should never go full-Rick-Astley.

So this happened overnight...

And while futures reacted (somewhat rationally to start with), the US open sparked yet another buying panic to erase all those losses... Until, that is, The Fed pooped in the punchbowl and announced a reduction in its daily liquidity bailouts...

China ended lower overnight, closing before the American investor panic lifted everything else...

Source: Bloomberg

European markets closed very modestly lower thanks to a buying-panic starting around 630amET...

Source: Bloomberg

The Dow was actually the worst performer today, Small Caps best... but the shine was taken off the ramp as The Fed signaled a reduction in its repo liquidity bailout...

The S&P 500 is at its highest relative to the 200DMA ever...

Source: Bloomberg

Today's price action was dominated by a bid for defensives with cyclicals lower...

Source: Bloomberg

TSLA shares were down overnight after a major recall and news of a secondary offering... but that didn't last long as the machines BTFD with both hands and feet...

As Bloomberg notes, this is the fifth straight time the market has reacted positively to a Tesla stock offering, despite the near-term harm these sales can cause by diluting the value of existing shares.

AMZN was up and MSFT down after a judge ordered JEDI contract development halted...

Credit spreads have compressed back to pre-Covid-19 levels but VIX remains higher...

Source: Bloomberg

Treasury yields were lower on the day - despite the stock market buying-panic...

Source: Bloomberg

30Y Yields were down around 2bps after the 30Y auction went off at record low yields...

Source: Bloomberg

The yield curve flattened further today...

Source: Bloomberg

Meanwhile in Greece... 10Y GGB yields broke below 1.00% for the first time ever..!!!!

Source: Bloomberg

The Dollar was bid during the US session for the 9th straight day...

Source: Bloomberg

Yuan faded notably, totally decoupling from US stocks at the cash open...

Source: Bloomberg

Cryptos had a wild ride today...

Source: Bloomberg

Bitcoin tagged $10,500 3 times in the last 36 hours...

Source: Bloomberg

Is crypto bid as negative-yielding debt forces investors out of bonds?

Source: Bloomberg

Copper managed gains today,. along with PMs as oil prices chopped around...

Source: Bloomberg

Gold prices held on to their China-death-surge gains...

Copper bounced but hit resistance...

Finally, this just continues to blow our minds... When The Fed gushed emergency liquidity to paper over any anxiety cracks around Y2K, it created the same meltup as is occurring now... and did not end well...

Source: Bloomberg

Looks like Nasdaq 10k is inevitable and then its down down down.

Tyler Durden Thu, 02/13/2020 - 15:59