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Stocks Jump, Dollar Dumps As Fed Non-News Trumps Second-Wave Virus Fears

Courtesy of ZeroHedge View original post here.

Disappointing China macro data, a "very serious" second wave virus breakout in Bejiing (and Guangzhou), and increasing concerns about the rise in US cases across several states… all led to some serious selling overnight with Small Caps down 5% and Dow futures down over 1000 points from Friday's cash close…

But then Europe opened, US opened, Florida's COVID case rose very slightly less than the 7 day average, and The Fed issued a press release saying exactly nothing new and algos went wild with FOMO… Dow futures soared over 1350 points off the lows…

USD dived as gold, HY, and stocks all popped on The Fed's latest announcement which was entirely old news:

As @knowledge_vital noted so pointedly:

"The Fed's 2pmET announcement seems unnecessary as they just repeated what the SMCCF was supposed to be doing all along, unless officials saw prices off steeply this morning and were looking to prevent a larger downdraft in markets."

The zombification of America is about to accelerate…

Christopher Cole (@vol_christopher) asked the most important question:

"Imagine if the Fed (via tax-payer funded Treasury SPV) back-stopped the debt of Enron and Worldcom back in the early-2000s? Both of these companies were "fallen angels" that employed a lot of people."

This is utter madness!!!

At least one utterly mad situation ended in the "right" direction as HTZ stocks slumped as it attempted to sell bagholders its bankrupt stock…

Overall markets were green with Small Caps leading the charge…

Futures show that Small Caps were down over 5% overnight and up 3% during the day session

Dow and Small Caps bounced again at the 100DMA, S&P bounced off 200DMA

Momentum gapped higher at the open and fell all the way into the red before it was rescued…

Source: Bloomberg

Bank stocks were very volatile…

Source: Bloomberg

Bonds were bid (which made sense) overnight but the selling accelerated all day to erase all the gains by the close…

Source: Bloomberg

10Y tested Friday's highs and lows…

Source: Bloomberg

The Dollar was bid in the Asia session but quickly sold from Europe and US…

Source: Bloomberg

Bitcoin dived back below $9000 briefly…

Source: Bloomberg

Gold ended the day lower but ramped back dramatically off the lows…

Silver managed to get back to even…

WTI manage to scramble back above $37…

Finally, we wonder if this is why The Fed dropped its nonsense, meaningless press release today – financial conditions have begun to tighten again…

Source: Bloomberg

And don't forget, Fed Chair  Powell is slated to testify before Congress this week about the state of the economy and the central bank’s efforts to help stem the coronavirus fallout… and the last thing he wants is a chaoitic meltdown in stocks.


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