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Silence Is Golden.

Don't expect it to last.

Things calmed down a bit on Wall Street Thursday, presumably because the Trump administration decided it might be a good idea to try and avoid sending all manner of mixed messages on trade.

The last several days have been defined by a bewildering series of soundbites from Mnuchin, Kudlow and Navarro, none of whom seem to be on the same page.

One person whose message hasn’t changed is Donald Trump, who said this on Wednesday evening at a characteristically batshit rally in North-fucking-Dakota:

  • TRUMP IN N.D. VOWS U.S. WILL FINISH `TRADE WAR’ IT DIDN’T START

That’s more reality distortion. The U.S. absolutely started a trade war. You can argue about whether or not that move was justified if you want, but for the umpteenth time, here’s that chart from Goldman that shows you how, over the course of the last six months, token tariffs on residential washing machines have somehow mushroomed into the threat of a cartoonish $800 billion in total prospective fuckery:

tariffs

In any event, U.S. stocks were higher, led by tech. Small caps underperformed. Notably,  the financials snapped a 13-session losing streak:

S&PFin

The curve flattened, with the 5s30s now below 25bps (or, just off cycle lows from earlier this month):

5s30s

European shares were lower again, in part due to comments Trump made at the same rally mentioned above. Specifically, he called out BMW and Mercedes (again). And so, the SXAP fell another 2.2%, and looks like it’s in a bear market. The index has fallen in nine of the ten sessions since the Draghi bounce:

SXAP

12-week low for the DAX:

DAX

European tech shares were crushed on Thursday, falling 2.5%:

SX8P

The Argentine peso was “at it again” (to employ a Trumpism), closing at a new record low of 28.12:

USDARS

The BCRA is trying to keep a handle on things, offering $150 million in auctions today and tomorrow.

Great day for the “other” peso though, as MXN rallied more than 2% against the dollar, which Bloomberg notes is “a 2.5 standard deviation move measured against 30-day historical vol.”:

USDMXN

Notably, EWW (the Mexico ETF) saw seven straight days of inflows through Tuesday. Apparently, folks are excited about Obrador now. The vehicle is up nearly 5% this month, after diving more than 13% in May:

EWW

Speaking of EM ETFs, EEM managed to limp higher on the session, but this has been the worst quarter since 2015 (more here):

EEM

Overnight, the malaise in China continued, as the Shanghai Composite sinks further into bear market territory, down for a fourth straight day and on pace for a sixth consecutive week of losses (the latest on the yuan story is here for those who missed it):

SHCOMP

Finally, for your moment of zen…

 

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2 comments on “Silence Is Golden.

  1. I was thinking of trying one of those pillows. Not now.

  2. I did not buy one because I am so sick of his stupid ads – constantly on late night! Reminds me of a snake oil salesman – HA! guess we know to trust our gut!

    I did buy some really good pillows – family owned company – https://www.alittlepillowcompany.com/
    I bought 3, loved them and bought 3 more; then ordered a few more for my adult children out of state and they love them too. Excellent company and they stand behind their product. btw, I have washed mine a few times and they are like brand new again, each time! No pressure sales and they don’t flood you with ads! Check them out!

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