Dow Ties Worst Losing Streak in 40 Years
The comments below are an edited and abridged synopsis of an article by Tyler Durden
There was a brief respite for Chinese stocks last week that quickly disappeared, and it leaked into US stock markets too. The Dow has had its longest losing streak since 1978. It’s down over 1% year-to-date, while the Nasdaq is up almost 12%. This is the worst year-to-date divergence between Dow/Nasdaq since 2009.
Is the short-squeeze over? The most shorted stocks suffered their biggest down day since April 6 last week, but even then they tried to squeeze the open.
The volume term structure is starting to wake up to the looming reality of the actual imposition of the trade tariffs and retaliations. Treasuries were bid with yields down 3-5bps, pushing all yields lower on the week.
The Dollar Index took a dive; while the drop felt notable (it was the biggest daily drop in June), compared to last week’s ECB surge it was a storm in a teacup. Longer term, it seems that the dollar index is stuck in resistance. Cryptos leaked lower, with no major catalyst evident.
WTI tested down towards a $64 handle and above a $66 handle ahead of OPEC.