Yet another risk-off day in markets yesterday as traders remain in damage control mode. Treasury prices rebounded a day after Powell threw cold water on rate cuts for this year, while the S&P 500 fell for the 4th straight day, the longest losing streak since January. The sell-off took no prisoners, with gold, oil, and crypto all trading on the back-foot as fear is over-taking FOMO in the near-term.

On the political side, the US imposed (anticipated) tariffs on Chinese steel amongst some other new restrictions, along with further apparent progress made on the TikTok bill in Congress.

With prices likely driven solely off technicals and positioning in the meantime, a quick look at various sentiment gauges will show that the recent sell-offs had inflicted significant technical damage, although we might be overdue for an oversold bounce in the meantime. The number of Nasdaq and SPX stocks hitting one-month lows hit a recent 1-year high, while Citi’s proprietary sentiment barometer flipped to ‘fear’ territory after the recent sell-offs.

On the earnings side, things have been off to a muted start with banks repeating mixed earnings (JPM missed, GS beat), while LVMH missed top-line sales somewhat on a lowdown in luxury purchases out of China. On the tech side, bookings at Dutch giant ASML fell 61% in Q1 to €3.6bln, widely missing estimates of €4.6bln. A slowdown in new orders from TSCM & Samsung led to weaker results, citing high inventory levels as semiconductor manufacturing capacity has been ramped up globally.

In crypto, nothing particularly new to note, though Ark ETFs saw a 2nd day of outflows at -$42mln along with -$133mln from Grayscale, while Blackrock’s IBIT only saw $18mln of inflows for a net outflow of over -$160mln. Expect to see more sideway / downward price action for the foreseeable future…

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