The price action of risk assets over the past hour is sobering. The S&P 500 turned a 110 point gain into a 60 point gain. It’s still up 1.5%, but there are still 90 minutes of trading left.
If the index has already been down for six straight weeks and can’t muster a decent relief rally, then those are curtains. We’ve seen this once before on Powell shutting out 75 basis points followed by a strong rebound and then a rout. We are now at lower levels, so you would expect some kind of bounce to last more than a few hours.
If not, God help the stock market bulls.
The cross asset look illustrates part of the problem. US 10-year rates rose 11 basis points today. This creates a negative feedback loop for stocks.
In crypto, bitcoin has also been a good leading indicator of risk sentiment and it fell back to $30,000 and the US trading low of $29,480.