Dollar Drops As Gold & Crypto Pop On Fed Flop, Washington Slop

Close to close prices hide what was a very noisy day in the markets with bonds, the dollar, and the broadest stock index flat-ish until some last minute malarkey. Headline hockey between The Fed “flop” – not delivering the QE Twist that so many had hoped for (but promising more will come) – and the constant ‘optimistic’ headlines from Washington over COVID Relief. As a side note, no one seemed to care that US retail sales were a major miss, homebuilder optimism rolled over, and gasoline demand continues to collapse in the US.

CNBC’s Scott Wapner: “I am not exaggerating when I say that I think the base case for next year is a boom.”

Just be careful what’s under the surface…

Treasury yields round-tripped chaotically… twice… today…only to end marginally higher (unch for all intent and purpose)…30Y Yields spiked 5bps at their peak before ending unch…

Source: Bloomberg

The 10Y Yield twice spiked above 94bps before fading back fast…

Source: Bloomberg

The Dollar has been up and down like a whore’s drawers…

Source: Bloomberg

…continuing that trend today, and ending lower on the day…

Source: Bloomberg

Nasdaq led on the day with Small Caps lagging…

Tech led the day with Utes lagging…

Source: Bloomberg

FANG stocks managed to push up to recent resistance despite GOOGL/FB facing renewed antitrust suits…

Source: Bloomberg

Notably there is a major decoupling between the options market’s index and single-stock regimes – As @VrntPerception noted: “Investors still seem cautious on the overall market even as they bet on individual names outperforming”

Source: Bloomberg

But gold and bitcoin bucked that trend, spiking higher…

Gold jumped back to overnight highs…

As Bitcoin roared through $20k for the first time ever…

Source: Bloomberg

To a new record high…

Source: Bloomberg

Oil prices rebounded off some overnight weakness to its highest close since Feb…

Silver had a huge day, back above $25.50…

This pushed the Gold/Silver ratio back to its lowest since 9/21’s spike

Source: Bloomberg

Finally, for all those demanding moar from The Fed… financial conditions have never, ever, been this easy… ever ever…

Source: Bloomberg

And with the dollar plunging and bitcoin soaring…

Source: Bloomberg

Be careful what you wish for. As VIX Whale ’50 Cent’ noted on his major allocation to Bitcoin: “We see this as a small but potent insurance policy against the continuing devaluation of the world’s major currencies. Bitcoin diversifies the company’s (much larger) investments in gold and inflation-linked bonds, and acts as a hedge to some of the monetary and market risks that we see.”

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