James Brodie
Head of Learning & Development, Flux
US 30-Year, Retail Investors Continue Selling US Tech, NASDAQ Posts Worst July
Bond yields surge as Fed uncertainty, Saudi-Iran tensions and tech selling drive volatility; Nasdaq posts worst July in 22 years.
Bond yields dominate markets.
- Saudi threaten to sell treasuries to prevent Trump from his ‘massive;’ attack on Iran, Brent falls 5.4%.
- The US Treasury intervened in yen exchange rates on Friday, marking the first time Tokyo and Washington joined forces to support the Japanese currency via outright purchases in nearly 30 years. To prevent Japan’s MOF selling further Treasuries to fund intervention. Yen is 4.5% lower in 3 days. Dollar index trading back below 100.
US 30-year making new cycle highs at 5.23%, its highest level since 2007 (mortgage rate approach 7%, at 6.75%), UK 30-year now just 6bp from cycle highs. (Chart 1: Bloomberg)
Asia today saw manufacturing PMIs and huge divergence. For most of Asia, the news is very positive with Japan, Korea, Taiwan, Southeast Asian economies like Thailand and Vietnam doing well. Meanwhile, China and Indonesia are lagging. The official manufacturing PMI for China is even worse so that means State Owned Enterprises are doing badly. Private sector also weakening too.
Last week saw the 2nd largest Hedge Fund de-grossing of the last decade. (Chart: Marlin Capital)
Retail investors are selling US tech stocks at a record pace: Retail investors sold -$316 million of US-listed information technology stocks on Wednesday, the largest daily sale on record. Over the 3 days ending Wednesday, retail investors sold -$643 million of tech stocks, the largest such outflow since data began in 2019. (Source: VandaLabs)
The Nasdaq just posted its worst July in 22 years. The Nasdaq-100 fell 6.6% in July, while semiconductor stocks led the decline, with SOXX down 22.1%, its worst month since 2002. Unlike previous selloffs driven by a single catalyst, this correction reflects concerns over AI valuations, crowded positioning, and rising Chinese competition.
The Kospi yo-yo, down -5.1% today after +17.9% on Friday.
The death of Fed forward guidance has a direct and underappreciated consequence: almost every meeting is now live. Investors can no longer front-run policy decisions with confidence, will repeatedly be caught off-guard, and the resulting uncertainty will drive structurally higher volatility across both bond and equity markets. This isn't a future risk - it is arguably already playing out in the form of a rising term premium, persistently elevated long-term interest rates, and an equity market that lurches rather than trends.
Sulphur prices continue to rise, affecting global copper, uranium, nickel and agricultural production. (Chart @ekwufinance)
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