Yield Curve Crushed To 10 Year Lows As Stocks Signal Trump-Tax-Plan Won't Pass
The bond market's reaction to the Trump Tax Plan...
Video length: 00:00:03
Bonds and Bullion were immediately bid and stocks and the dollar sank on the Trump Tax plan release - but as Europe closed, gold was 'managed' down, leaving bonds outperforming on the day... And stocks back to unchanged as the market realized there is little chance of this bill passing... (So Bonds price out a little more growth hope and stocks flat on status quo and Powell)
(Click on image to enlarge)
The immediate reaction in stocks to the release of the Trump Tax plan was disappointment - sending stocks lower and VIX higher - but that was quickly met by the machines crushing VIX back to a 9 handle...
(Click on image to enlarge)
And as it became clearer that this bill was a non-starter, stocks roared back...
(Click on image to enlarge)
Some of the bigger reactions to the Tax Bill were homebuilders...
(Click on image to enlarge)
And Private Equity shops (Apollo, KKR, KW)... though there did not appear to be anything in the tax bill
(Click on image to enlarge)
And TSLA kept falling (not helped by lower EV credits in the tax bill), tumbling back below $300...
(Click on image to enlarge)
Finally, Bank stocks outperformed the market... as the yield curve crashed...
(Click on image to enlarge)
High yield bonds did not love the tax plan...
(Click on image to enlarge)
Treasury yields were down across the board having fallen in the early European session then legged lower on the Trump Tax plan release...
(Click on image to enlarge)
10Y seems to bid in Europe...
(Click on image to enlarge)
With the 'growth'-related 5s30s curve slumping to new cycle lows...
(Click on image to enlarge)
Breaking down to new cycle lows - flattest since 2007...
(Click on image to enlarge)
The Dollar Index ended lower on the day but was whipsawed around quite a bit... like the other markets, FX seemed to signal no hope for the tax bill passing...
(Click on image to enlarge)
Crude rallied on the day but copper, silver, and gold ended unchanged after jumping on the tax plan...
(Click on image to enlarge)
The bottom line from the reaction by markets seems to be traders are not expecting this bill to pass at all... and bonds are signaling the recent reflation exuberance is now fading fast.
Disclosure: Copyright ©2009-2017 ZeroHedge.com/ABC Media, LTD; All Rights Reserved. Zero Hedge is intended for Mature Audiences. Familiarize yourself with our legal and use policies every ...
more