The US plans to impose tariffs on up to $60bn in Chinese goods and limit the country’s investment in the US in retaliation for years of alleged intellectual property theft (such as my book which is sold in China, yet I have never received a penny in royalties). But it is more about inequality in tariffs where China has higher tariffs on US imports than the US has on Chinese imports.
As Dr. Hannibal Lecter once uttered, “Quid pro quo.”
Financials and Industrials led the way down.
The VIX spiked to 23.34.
The media ignores the fact that Fed rate increases coupled with balance sheet decay has helped make the equities markets more fragile.
Today’s US Treasury 30-year bond auction was strong. $13 billion were sold to the public and none purchased by The Fed for the first time since the December 12, 2017 auction.
So far, so good. Despite massive Federal spending and projected budget deficits, Treasury auctions are going well.
The 10-year T-Note Volatility index (TYVIX) has declined to around 4.
The Cboe Equity Put/Call Ratio is nearing pre-meltdown levels. Since the index measures the volume of equity puts versus calls, it will rise on an increase in bearish bets and fall when demand is greater for bullish ones. The ratio peaked this year at .88 on Feb. 9 following the market’s 10 percent drop to start that month.
The CBOE S&P500 Volatility Index (or VIX) is almost back to pre-meltdown levels too,
The 10-year T-Note volatility index is actually below the February meltdown level, but above the January and early February levels.
The market is stabilizing as The Fed engages in The Fed Boogie.
Interest rates: Get up, get up.