Stocks didn’t “yuan” to hear about it today. China’s devaluation of its currency jolted global markets, hitting stocks and commodities and boosting government bonds, as well as fueling worry about slowing growth from one of the world’s biggest importers of raw materials.
The Dow fell 1.2% to 17402.84, erasing most of the previous session’s gains. The S&P 500 fell 1% to 2084.07. The Nasdaq fell 1.3% to 5036.79.
Crude oil is about $1 away from the March lows of $43. It will be interesting to see if that catches a bounce at support or crashes lower.
The most interesting thing I see out there is that all the bond bears are wrong again. The 10 year note (yield) is flirting with a break of the May lows. As a result, bond equivalent plays like IYR and XLU are acting batter again. The 10 year closed at a 2.13% yield today.
I’m not seeing us oversold by any stretch yet, but a positive takeaway is that bearishness is increasing quickly. Thats usually a good contrarian sign. We shall see.
See you in the morning.