As Expected complete Bloodbath at #WALLTREET

Closing changes in US equities:

Closing changes in US equities:
  • S&P 500 down 92 points to 3833 (-2.3%)
  • Nasdaq -3.3%
  • DJIA -1.6%
  • Russell 2000 -3.8%
The bond market is a mess:
  • 2s +5 bps to 0.17%
  • 5s +22 bps to 0.82%
  • 10s +15 bps to 1.53%
  • 30s +6 bps to 2.29%
There are a multitude of ways to spin this but this is a market that suddenly wants to reassurances from the Fed that they won’t let yields run too far too fast. There’s also very¬†good argument¬†that convexity hedging in the mortgage market combined with dealer selling after the auction is responsible for a good chunk of this move.
The good news is that the S&P 500 and Nasdaq both closed above Tuesday’s low. The bad news is that tomorrow is the PCE report and if inflation is high, those levels aren’t likely to hold.