Well, there were some fireworks on Wednesday – or what counts as “fireworks” in a world where cross-asset vol. looks like this:


A confluence of factors conspired to weigh on sentiment including – according to traders anyway – jitters about tax reform, disappointing results from Chipotle and AMD, and just a general sense that it’s time to take a step back in light of the myriad geopolitical/policy land mines currently littering the landscape.

It looks like Janet Yellen is no longer in the running for the Fed:


And Gary Cohn is definitely out according to Bloomberg and more than that, sources say he’s likely to leave the administration altogether once the tax reform deal is done (does that mean if it never gets done he’ll stay?).

That’s just another indication that people are starting to get concerned about how history is going to remember them if they stick around as the “Trump train” flies further off the rails with each passing tweet.

Speaking of tweets, there were plenty of those, although by Trump standards they were tame if still full of lies:


Worst day for the Dow since early last month, same for the S&P:


The VIX rose above 13 at one point which means there were some former Target managers beating their dogs somewhere:


Note that the VVIX/VIX ratio has now come back down from recent extremes (so, higher denominator helps us return to some semblance of normalcy):


2.40 is the magic number for 10Y yields and we’re well through that although the dip buyers emerged when we hit 2.47 (2.4736 being the highest level in seven months). There’s an argument to be made that some of the weakness in equities was a whiff of a “tantrum”:


Panning out:


Hard “truths”:


This is heresy and is enough to make CNBC anchors-turned asset managers want to throw a witch into the water and see if she floats:


Tough day for Boeing (full-year guidance midpoint missed analysts’ estimates), but of course it barely makes a dent in the YTD rally for the shares:


Worst day for Chipotle since 2012:


The lira took a hit after Bloomberg reported that Germany is “actively working to cut funding to Turkey from the country’s state-owned KfW bank.”


You’ve got to know Erdogan is furious…


Speaking of Erdogan, he was out putting on his rates strategist hat again as he’s prone to do. “Turkish President Recep Tayyip Erdogan convened top economy officials and executives from state banks on Tuesday to press them for a solution on lowering interest rates,” Bloomberg reported, citing four people with knowledge of “the matter.”

Good day for the pound, as a better-than-expected GDP print helped make a better case for a rate hike from the BoE next week.


The Loonie took a dive after the BoC stayed on hold as expected, but came across as dovish in the minds of traders who probably read a little too much into the “cautious” line:


Meanwhile, Banxico has apparently seen enough peso depreciation, so they’re going to boost FX hedges in auctions, an announcement that sent USDMXN tumbling:


Believe it or not, the Nikkei fell, snapping a record-breaking 16-day win streak:


So that’s it for today, and in keeping with the “fireworks” theme, here’s Drake to … to … I don’t know what … whatever it is, it’s not right on the teleprompter… I can’t read it, there’s no words on it… to play us out, what does that mean?… to end the post?!…


“That’s it for today, I’m Heisenberg and we’ll leave you with Drake and ‘Fireworks'”…

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