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[Markets] Big-Tech Breaks Weekly Win Streak, Bonds Shrug Off Inflation-Fest Big-Tech Breaks Weekly Win Streak, Bonds Shrug Off Inflation-Fest

It was a week of transitory-trampling inflation prints with CPI, PPI, Import/Export Prices, UMich inflation expectations, and the concomitant 'hangover' as buyers' sentiment (for homes/cars/durables) crashed due to the soaring prices... and stocks did not like it (especially Small Caps). As we noted earlier, there was a big drop in gamma after the open's OPEX which enabled today's pain (the last 3 Fridays have been big up days)... Nasdaq has been up 8 weeks in a row before this week...

S&P 500 e-mini futures have printed all-time highs in 13 of the last 16 sessions. This was the first weekly drop in Nasdaq since mid-May, and the worst week for Russell 2000 since Jan 2021... and worst week for Small Caps since Oct 2020.

The market's message to Powell...

Small Caps vs Big-Tech continue to track real yields...

Source: Bloomberg

Small Caps rebound back over its 50- and 100-DMA did not hold this week...

Breadth refuses to confirm the overall exuberance of this recent run...

Source: Bloomberg

Under the surface, traditional defensive sectors such as Utilities, Staples, and Real Estate are all outperforming with Energy getting monkeyhammered. Financials ended lower despite earnings being encouraging...

Source: Bloomberg

Energy stocks are in correction, down almost 14% from their early June highs...

Source: Bloomberg

That is even more clearly shown here with 'Defensives' massively outperforming 'Cyclicals'...

Source: Bloomberg

Notably, the market's largest stocks (the FAAMG complex which now makes up ~23% of the S&P 500's market cap), has not performed well this week, seeing heavy selling pressure hit each bounce...

Cathie Wood's ARKK was clubbed like a baby seal this week (worst week in two months)...

Banks were mixed after earnings this week with BofA worst and MS best...

Source: Bloomberg

"Most Shorted" stocks tumbled almost 8% this week, the worst week (or best if you're short) since Oct 2020...

Source: Bloomberg

Long-end yields are down for the 3rd straight week (8th week of the last 9)

Source: Bloomberg

30Y yields ended with the lowest weekly close since Jan 29th...

Source: Bloomberg

Real yields tumbled to their lowest (most negative) since mid-Feb (suggesting more upside for gold)...

Source: Bloomberg

The dollar ended higher on the week...

Source: Bloomberg

Cryptos were notably lower on the week but Bitcoin held around $32,000 and Ethereum above $1900...

Source: Bloomberg

Oil's worst week since March (first 3-week losing streak in over a year) as WTI hit a $70 handle after UAE headlines...

Gold is up for the 4th straight week (albeit with an ugly end to the week)...

Finally, as @Not_Jim_Cramer notes, the plunge in the S&P's real dividend yield has not ended well in the past for stocks...

And don't forget Peter Lynch's "Rule of 20"...

Tyler Durden Fri, 07/16/2021 - 16:00
Published:7/16/2021 3:03:04 PM
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