Traders are waking this morning in the US to some relative market mayhem and questioning what came first -the oil spike or the geopolitical angst- to trigger these moves as it appears the market finally remembered there's more going on in the world than trading 'short compute' demand to the moon...
Oil prices are up significantly (WTI >$100)...
Bond yields are breaking out everywhere (30Y UST 5.10%!, 30Y Gilt 5.82% - highest sine 1982)...
Equity markets sharply lower overnight (Kospi -6%, Japan Semis approx. -5%, Japan momentum approx. -2.5% Nasdaq -1.5% aslevered ETF exposure and high concentration clearly exacerbating the sell off)...
The catalysts are intertwinedwith what appears to be a nothing-burger in terms of outcomes from Trump's trip to China (exacerbated by Xi's not so hidden threat) and Trump's comments on the Strait of Hormuz..
As Goldman Sachs one-delta desk-head, Rich Privorotsky, notes this morning,the Xi/Trump summit appeared to yield little in the way of immediate tangible outcomes.
Despite all the positive rhetoric, Boeing sank, KWEB closed -4.6%, the details around NVIDIA H200 exports remain murky and even some of the headline “wins” looked shaky.
Reuters reported that Chinese customs “halted export clearances for hundreds of U.S. beef plants” just hours after approvals had seemingly been renewed during the summit.
For now this still looks more like stabilization than a durable reset.
Feels like the US side came hoping for transactional risk deals while China was looking for a broader multi year reset and foundations for more constructive dialogue.
Source: ZeroHedge News
