Thursday was not a great session on Wall Street.
U.S. stocks were bludgeoned as the combination of Apple’s guidance cut (and, more to the point, what that guidance cut said about the outlook for global growth) and a truly horrific ISM print made for a potent one-two punch that, by the closing bell, knocked the Nasdaq lower by 3%.
It looks to me like the Nasdaq has fallen ~3% or more on 7 separate occasions since things started to get messy in October.
(Bloomberg)
Apple was obviously crushed. This was the worst day in ~6 years.
(Bloomberg)
I’d say “this was the worst day for the FANG+ index since…”, but at this juncture, that’s not really saying a whole lot – basically, it’s “the worst day since the last worst day.”
(Bloomberg)
Here’s the breakdown on the FANG+ gauge (top pane), along with the sector map for the S&P (bottom):
(Bloomberg)
This looks like the worst session for Info Tech since the days of the sovereign debt crisis.
(Bloomberg)
Second-worst day for the SOX in years:
(Bloomberg)
10Y yields continued to fall, diving more than 6bps, this time not led by breakevens.
(Bloomberg)
3-month/ 5-year is now inverted.
(Bloomberg)
And look, parity!
(Bloomberg)
Credit doesn’t look too bad, all things considered.
(Bloomberg)
USDJPY of course pared some of the flash crash declines, but was still sharply lower on the day – below are some completely superfluous annotations as anyone who was paying attention should be able to label this chart.
(Bloomberg)
Ultimately, it should come as no surprise that we got yet another bloodbath in equities because, as explained here earlier today (and I’m quoting myself again, because nothing says “hopeless narcissist” like quoting yourself):
It would be difficult to conjure a more foreboding set of circumstances if you tried. Traders and investors, already shell-shocked, are staring at i) an Apple guidance cut blamed on China’s economy and the trade war, ii) a flash event catalyzed by an outlandish surge in the yen, and iii) an absolutely horrible ISM manufacturing print.
Now where’s the Trump tweet and the Steve Mnuchin emergency call to Jamie Dimon?
Lets see AAPL having a hard time selling $1,000 phones for little compelling reason to “upgrade”? Trump takes his base for granted AAPL takes their base for granted. The one trick pony needs to find more tricks.
The historical pattern is that when things become commodities (tee vee, toasters etc.) that they can only become a part of an income stream. Just like digital storage, when everyone can make it for less, then more and more for less the chin music stops. Other than cachet, what does Apple offer over Android? Yes, yes a more integrated (read cool) way to sell shit. It will not be long before China has no need of Apple. Technology is the great equalizer. Sam Colt built one of those and shortly so did everyone else.