Morning 2-28

• China PMI data released this weekend

• Ex Fed Governor Warsh said Fed should cut rates to buy time

• Yesterday, in notional terms was largest US day in history near $780bn (above 09 crisis records). Approx $40b in futures traded in the last 10min of the trading session. $42b traded from 4-5pm.(Reuters)

US 2-year yields < 1%@ .97%,5 years yields 1%, Spot Vix printed 47! 30-year yields touched 1.66%- and 10-year yields touched 1.15% unreal. MOVE index, treasury Vol index touched 3-year highs

Per Mizuho Fastest market correction in history. The S&P 500 plunged -4.42% yesterday on continued coronavirus fears (its worst daily performance in over 8 years), and we are now officially in a correction. With one day left of trading this week, it’s possible that we finish with the 3rd worst calendar week in 20 years (after only Lehman Brothers & 9/11 attacks). The S&P 500 has finished down more than 3% for 3 out of 4 days this week. This was the fastest the S&P 500 has erased 4 months of gains, with most of the damage coming just this week. 97% of stocks in the S&P 500 closed lower yesterday, while the VIX (volatility index) spiked to 40 for the first time in years. ◘

@sentimentrader: 62% of the S&P 500’s members are now oversold (RSI under 30), and 80% of its members have crashed below their lower Bollinger Bands in the past, such widespread selling usually led to sharp rallies over the next few weeks/months.

Feb 28 (IFR News) – The moves at the front-end are truly amazing with the market now fully priced for the Fed to ease rates at its next meeting on March 18. The probability of a 25bp cut to the FF target range vs a 50bp cut is now 65% and 35% respectively – and at one point it had been 50:50. A week ago the probability of a 25bps cut was a mere 10%. The odds of the Fed cutting rates by more than three times this year are now at 80% so a lot is priced into the market. Last year the Fed showed a tendency not to want to disappoint expectations and the same might play out this time around.

Besides Corona Virus worries, War drums beating louder in Syria as Russia and turkey escalate their conflict things and approach direct armed conflict (BBG) Adds a little more volatility and worries to the trade.

Markets continue to react to negative news of Corona Virus as there is no peak of Chaos in sight. Until the markets think a peak is reached, they will trade heavy. Plenty of Rumblings of some type of Concerted Worldwide Emergency Central bank cuts is imminent, all eyes on the wire today to see if that Comes to fruition

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