We Have Never Seen This Before. Are Central Banks Rethinking QT?

On the heels of continued volatility in global stock markets, today one of the greats in the business says, “That’s never happened before.” Are central banks rethinking QT?

Central Banks Rethinking QT?
August 15 (King World News) – Here is a portion of today’s note from legend Art Cashin:  Traders think this flash of global volatility may cause the world’s central banks to possibly rethink their plans for quantitative tightening. 

How Unusual Is It? – We were intrigued by this observation Monday night by the always insightful Jason Goepfert of SentimenTrader. 

Here’s a bit of what he wrote: 

It’s the U.S. versus the world. Year-to-date, the S&P is up more than 4% while world stocks (excluding the U.S.) are down more than 4%. That’s never happened before. Other large differentials in YTD returns between the markets have led to weak returns in both, with world stocks tending to see the weakest returns.

“That’s never happened before”. A rather rare observation. 

Overnight And Overseas – Most Asian markets moved lower overnight. Tokyo closed with a moderate loss while Chinese markets got dinged smartly. Hong Kong was down the equivalent of 390 Dow points. Shanghai got hit even harder, falling the equivalent of 508 Dow points. India, luckily, was closed. 

In Europe, stocks are modestly lower. The losses on the continent are mostly fractional, while London is trading modestly lower. 

Among other assets, Bitcoin is seeing a mild bounce and is trading just above $6200. Gold is weaker, dipping below $1200. Crude is lower on a surprise jump in inventories. The euro is down a bit against the dollar and the yield on the ten year is down a few ticks. 

Consensus – More regulatory shuffling makes it more difficult to short the Turkish lira. The lira is up slightly but equity futures are lower. That’s because the focus has shifted overnight to China, whose markets are staggering. 

Let’s see if the China worries begin to spread through Asia. The selloff in copper may be accelerating. Stay alert and very, very nimble.

***ALSO JUST RELEASED:  “On The Subject Of The Current Turbulence We’re Seeing In So Many Places” CLICK HERE TO READ.

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