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Equity Roundup: Good Feeling Gone? Or Sell-Off Buy Opportunity

US STOCKS
Good feeling gone after Wednesday's post-FOMC relief rally in stocks where SPX climbed over 4300.0 briefly. Equity indexes have plummeted after the bell back to Tuesday lows (but off lows for the week it that's any consolation) amid -3.49% drop in SPX to 4146.50, -4.8% in NASDAQ to 12347.99 and -3.0% in DJIA at 33035.34.
  • Focus back on policy: Tsy futures extended session lows after gaining briefly on BoE dovish hike annc. Bond yld have surged to 3.1936% high -- late 2018 levels as curves bear steepen: 2s10s +7.158 at 35.979 last, 36.828 high.
  • It's not that the Fed is less hawkish after hiking 50bp and penciling in June for start of QT, it's that the relief rally that followed Chairman Powell's presser was overdone. Short end remains under pressure, pricing in 50bp hikes over the next three meetings.
  • Technicals for SPX eminis, ESM2 eying key support of 4056.0 bear trigger and May 2 low. Next key support at 4029.25 May 13 2021 high. Severity of moves has desks looking up exchange circuit breakers. For reference:
  • -7% Breaker: ESM2 at 3994.25; DMM2 31,585; NQM2 12,584.00
  • -13% Breaker: ESM2 3736.25; DMM2 29,542; NQM2 11,771.75
  • -20% breaker: ESM2 3435.25; DMM2 27,157; NQM2 10,824.25
  • SPX leading/lagging sectors: Utilities underperforming the least (-0.87%) Laggers: Consumer Discretionary (-5.58%) weighed by autos.
  • Dow Industrials Leaders/Laggers: Coca-Cola (KO) -0.50 at 64.53, Verizon (VZ) -0.58 at 47.79. Laggers: Home Depot (HD) -16.24 at 299.07, United Health (UNH -15.89 at 491.71, Microsoft (MSFT) -13.94 at 276.03.
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