Oil bounced notably overnight after a surprisingly large crude build reported by API, but there was some selling in QTI/RBOB into today's DOE data, but that ended quickly as DOE reported major inventory draws across the board sending WTI spiking above $46. However, after last week's drop, US crude production (in the Lower 48) soared by its most in 6 months.
API
10Y Treasury yields are hovering back at 2-month highs, but that 'selling' is not rotating into stocks as high-beta 'no brainers' are slumping once again. FANG stocks have erased yesterday's gains and Nasdaq 100 is now back at its lowest since April...
As both bonds and stocks are sold...
Following the shizophrenic picture of Manufacturing in 'Murica that we got earlier in the week, this morning's Services surveys show a modest and consistent rise for Markit's PMI (strongest since January with input prices soaring at the fastest pace in 2 years, and new orders at 5-month highs), and ISM's (employment down as new orders rise).
A reminder of the divergence between ISM and Markit's view of Manufacturing...
While the hedge fund community has once again failed to take advantage of what so many predicted would be a new "golden age" for the 2 and 20 crowd as a result of a collapse in pairwise correlations, largely as a result of short stocks squeezing higher and hurting performance, it has been a different story for the "long only" mutual fund group, which according to a new analysis by Bank of America enjoyed its best quarter and 1H half in eight years, specifically "over half (54%) of large cap fund managers beat their benchmarks in the first half of the year- for the first time since 2
After jumping heroically in May, ADP reported a disappointing 158k employment gain in June (188k exp.) and revised May's exuberance notably lower (253k to 230k). While 'soft' survey data suggests empoloyment should be resurging, the hard numbers are disappointing again...
Medium-sized firms dominated the gains (+91k vs Small firms 17k and Large firms +50k).
Perhaps most notable for President Trump is that all 158k of the gains came in the Service-Producing sector of the economy - Goods-Producing Sector gained zero jobs.