Carnage Everywhere As Market “Begins To Break”

There is no other way to describe today’s market carnage than a market in turmoil where things are rapidly breaking as the sudden disappearance of Russia’s “toxic” commodity collateral is suddenly sparking contagion and widespread liquidations.

With S&P futures a one way elevator lower after a modest rip higher on Ukraine ceasefire optimism early in the session, sending spoos more than 120 points down from session highs and closing down 2.9%, below 4,200, its worst close since October 2020…

… and the Dow tumbling more than 800 points, everything was in the red, with the exception of the defensive utility sector and of course energy which is basking in the glow of a historic surge in the commodity space.

The Nasdaq tumbled 3.6% with the help of Facebook and Moderna both of which have wiped out more than 50% of their value from all time highs, and is now down more than 20% from its all time high, closing in a bear market, where it joins the Russell, which is now also down more than 20% from ATH.

Consumer discretionary stocks, with a decline of more than 3%, led the S&P 500 to a fresh session low. Companies with outsize exposure to Europe – Calvin Klein owner PVH and Ralph Lauren – were among SPX stocks with the biggest drops, while Amazon and Apple are among top decliners on a points basis. Higher energy costs and soaring food prices may crimp consumer spending in other areas, with oil posing a particular challenge. Consumer discretionary stocks are the worst performers among SPX sectors this year, shedding ~19% while the broader index falls ~11%.

While energy was the best – and only outperforming – sector, a testament to today’s dismal risk off mood is that the small-cap Russell actually outperformed both the S&P and the Nasdaq, with the latter tumbling more than 3%.

Europe was even worse, with Germany’s DAX closing down 2% – at the lowest level since November 2020 – and bringing total declines since its January record high to bear-market inducing 21%, while the broader Euro Stoxx 50 also ended 1.2% lower, and also closing more than 20% lower in a bear market.

Believe it or not, those were some of the more timid moves observed today. As Nomura noted earlier, there have been some truly historic swings across all assets, especially Energy where oil had its biggest daily swing ever, with Brent surging to near $140 before tumbling $20 after Germany said it has no plans to halt Russian energy imports, only to reverse higher again…

… to gas, with the European nat gas benchmark trading > 79% to an all-time high, before also reversing gains…

… to Industrial Metals, where Nickel exploded 82% in one day amid a wave of short squeeze in the largest dollar gain in 35 yr history of LME contract…

… and even FX, with the Swiss trading through parity with the Euro earlier, the first time since the SNB peg break in ’15…

… to Inflation, where even’s Europe’s 5y5y inflation swap soared to 8+ yr highs…

… to EU Financials, with Europe’s banks (SX7E) tumbling -34% in less than a month amid panic over Russian exposure.

Among other commodities, the type that actually matter when considering social unrest and revolutions, wheat futures closed limit up again at a record $1,425 translating into an all time high $12.94 per bushel on fear Ukraine and Russian output will be cut off.

While those keeping track of market dislocations did not find anything abnormal in today’s move in the FRA-OIS, which was roughly unchanged from Friday’s close after blowing out late last week…