- Prison Planet.com - https://www.prisonplanet.com -

Carnage: Stocks Plunge Most In 2019 As China Sparks Global Turmoil

Zero Hedge [1]
August 5, 2019

Remember a week ago – smooth sailing, record highs, goldilocks, Fed, not a care in the world. And then…

… China unexpectedly allowed the yuan to devalue dramatically in retaliation to Trump’s latest tariff hike…

[2]

And all hell broke loose…

[3]

… as Chinese stocks closed at their lows…

[4]

Elsewhere in Asia, Hong Kong Dollar forwards plunged to a level that suggests a peg breach within 12 months

[5]

This wasn’t lost on Hong Kong stocks which amid violent protests, tear gas, a crippling strike  and the threat of an imminent Chinese invasion, tumbled 3%, erasing the year’s gains, and suffering the longest losing streak since 1997.

[6]

European stocks were also hammered – their biggest two-day drop in thee years – playing catch down to US markets from Friday and extending Friday’s biggest losses of 2019…

[7]

German DAX broke to its 200DMA…

[8]

German Bund yields crashed to new record lows -53.6bps!!!

[9]

But Germany is not alone…

Since Powell started speaking (and Trump’s tariffs), bonds and bullion are well bid, the USD is marginally weaker and stocks are a bloodbath…

[12]

 

US equities collapsed today – worst day of the year – with the S&P dropping over 3%, its worst drop since December 2018 before recouping some losses.

[13]

… while the Dow briefly dropped almost 1000 points, the third biggest point drop in history.

[14]

… and all sectors tumbling although homebuilders were the best of the worst:

[15]

Nasdaq is down six days in a row – its longest losing streak since before Trump was elected (Oct 2016)

[16]

Technical Support was blasted – Small Caps, Trannies <200DMA and S&P, Dow, Nasdaq <100DMA

[17]

FANG Stocks were slammed (not helped by the 8th straight down day for AMZN)…

[18]

AAPL plunged on the day, now down 13% from earnings night highs…

[19]

VIX hit 23 (doubled off its 11 handle from just over a week ago)…

[21]

And credit spreads blew wider…

[22]

Treasury yields collapsed to fresh cycle lows…

[23]

10Y Yields are back below Trump election lows, sliding as low as 1.72%, less than 30bps from all time lows…

[24]

The 3 Month-10 Year yield curve collapsed to its most inverted this cycle (most inverted since 2008)

[25]

Despite the crash in the yuan, the dollar also slipped lower, holding at pre-Powell levels…

[26]

The carnage also swept across developing markets, with the EM FX plunging to 11 month lows…

[27]

The safe haven today – in addition to Treasurys – bitcoin and other cryptos which were aggressively bid over the weekend amid the chaos in China and Hong Kong…

[28]

Pushing Bitcoin up near $12,000…

[29]

Copper and Crude lagged as PMs rallied on the day…

[30]

WTI extended losses from last week…

[31]

And gold soared on the day, despite “their” best efforts to crack into the London Fix…

[32]

Indeed, as some pointed out, in addition to soaring cryptos, silver and especially gold did just fine…

… and gold has now overtaken the S&P 500 year-to-date…

[35]

Gold in Yuan has exploded higher…

[36]

And gold in pounds remains at a new record high…

[37]

Bitcoin and Bullion are bouncing back up to the “policy-maker-idiocy indicator” as negative-yielding debt keeps soaring…

[38]

Finally, stocks have a long way to fall yet to catch down to bonds’ reality…

[39]

If and when that happens…