{"id":51508,"date":"2020-03-01T18:45:41","date_gmt":"2020-03-01T23:45:41","guid":{"rendered":"https:\/\/olduvai.ca\/?p=51508"},"modified":"2020-03-01T18:46:48","modified_gmt":"2020-03-01T23:46:48","slug":"equity-oil-futures-crash-as-market-opens-without-fed-bailout","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=51508","title":{"rendered":"Equity & Oil Futures Crash As Market Opens Without Fed Bailout"},"content":{"rendered":"\n

Equity & Oil Futures Crash As Market Opens Without Fed Bailout<\/a><\/h3>\n\n\n\n

After Friday afternoon’s combination of Jay Powell’s statement and a major rebalancing flow sent stocks soaring into the close, a lack of the much-demanded ‘coordinated global easing’ this weekend has spoiled the party and futures are opening down hard.<\/p>\n\n\n\n

Friday’s almost 1000 point surge in less than an hour – on absolutely nothing but hope that somebody will do something –<\/p>\n\n\n\n

\"\"\/<\/figure>\n\n\n\n

<\/a>Oil is also collapsing with WTI at a $43 handle…<\/p>\n\n\n\n

\"\"\/<\/figure>\n\n\n\n

And gold is bid…<\/p>\n\n\n\n

\"\"\/<\/figure>\n\n\n\n

<\/a><\/p>\n\n\n\n

And bond prices have hit a new high, erasing the late-Friday spike in yields…<\/p>\n\n\n\n

\"\"\/<\/figure>\n\n\n\n

Additionally, we detailed earlier, the following chart from Deutsche Bank shows, overall liquidity for S&P500 futures has fallen to all time lows <\/strong>even though the S&P was trading near all time highs as recently as a week ago. As such, the recent melt up levitation was nothing more than a mirage, propelled mostly by stock buybacks among the Top 5 tech stocks and fickle retail investors, and once these were removed, the market entered the proverbial “trapdoor opening” formation.<\/p>\n\n\n\n

\"\"\/<\/figure>\n\n\n\n

The problem is that virtually no liquidity, extreme moves to the downside are now very likely which in turn creates a reflexive relationship with risk sentiment, as the lower the liquidity and greater the selloff, the higher volatility surges leading to even lower liquidity, even more selling and so on.<\/p>\n\n\n\n

In short: absent central bank intervention, it will be virtually impossible for any major player to arrest the market’s collapse.<\/strong><\/p>\n\n\n\n

Of course, that is a big ask the market is already pricing in almost 4 rate-cuts in 2020…<\/p>\n\n\n\n

\"\"\/<\/figure>\n\n\n\n

And almost completely priced-in 2 rate-cuts in March…<\/p>\n\n\n\n

\"\"\/<\/figure>\n\n\n\n

That’s a lot to expect from a Fed that doesn’t want to signal panic and burn through its ammunition so fast without evidence of economic disruption.
<\/p>\n","protected":false},"excerpt":{"rendered":"

Equity & Oil Futures Crash As Market Opens Without Fed Bailout After Friday afternoon’s combination of Jay Powell’s statement and a major rebalancing flow sent stocks soaring into the close, a lack of the much-demanded ‘coordinated global easing’ this weekend has spoiled the party and futures are opening down hard. Friday’s almost 1000 point surge […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[124,303,1849,3650],"class_list":["post-51508","post","type-post","status-publish","format-standard","hentry","category-economics","tag-central-banks","tag-fed","tag-financial-markets","tag-us-federal-reserve"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/51508","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=51508"}],"version-history":[{"count":2,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/51508\/revisions"}],"predecessor-version":[{"id":51510,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/51508\/revisions\/51510"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=51508"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=51508"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=51508"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}