Well, that started with a bang and ended with whimper for the Dow and the S&P. For the Nasdaq, it was a veritable shit show from the word go.
The Dow managed to close at a record high but most of the euphoria that was evident last night when futures jumped out of the gate as investors tried to price in the progress on tax cuts faded after the cash open on Wall Street.
Worst five-day underperformance for the Nasdaq 100 since the bull market began:
Just to drive the point home, have a look at your favorite high-flyers since last Wednesday’s tech bloodbath (that red line is 0):
That is some ugly shit right there and it does not bode well for the 2 and 20 crowd:
Meanwhile, the financials continued to rally. Here’s what they’ve done over the same period shown in the chart above for tech:
November was the best month of inflows into XLF since the election, underscoring the contention that at least in equities, the “Trump trade” has been given new life by the tax bill:
The dollar rose versus all of its G-10 peers as investors tried to reconcile the downside from the ongoing Russia probe with progress on taxes (and also with the possibility of a government shutdown amid more partisan gridlock):
Treasurys meandered higher throughout the day, ultimately retracing the losses from the gap lower on the Asia open when everyone was still trying to make up for the flight to safety triggered by the Friday ABC headline:
The curve continues to collapse (because why wouldn’t it):
The pound was whipsawed as Brexit cheers turned to Brexit jeers on this headline:
- NO DEAL TODAY FROM BREXIT TALKS: BBC
That came after earlier headlines that found EU chief negotiator Michel Barnier telling EU lawmakers that a breakthrough was likely today. Or at least according to comments from MEP Philippe Lamberts who spoke to reporters in Brussels.
European equities still closed higher across the board although they did dip a bit on Brexit deal headline:
Oil fell sharply on what everyone is calling profit taking but on what one might fairly chalk up to some combination of “sell the OPEC news”, a stronger dollar, and jitters about what the deal might mean in terms of encouraging more shale production. Notably, the U.S. Oil Fund saw some $169 million in outflows last week. There were some funny comments out of Al-Falih:
- AL-FALIH: U.S. SHALE OIL OUTPUT TO GROW AMID OPEC+ CUTS
- AL-FALIH: OPEC+ WON’T CHANGE COURSE IN 2H 2018
- AL-FALIH: OPEC+ DOESN’T INTEND TO OPEN TAPS, FLOOD MARKET
Meanwhile, less than a week until the end of the world. Stock up on ammo and canned goods…