Commodities Not Suggesting Reviving Economy, FANG Stocks Plunge Most In 3 Months, AAPL Nears Correction, Traders Are Betting Big On A Stock Market Shock

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Tech stocks are getting hammered this morning, extending losses from Friday, led by NFLX.

This is FANG’s biggest drop in almost four months as they catch down to the Buy-The-F**king-H-Bomb-Test-Dip lows…

AAPL is also down once again – having erased all the gains since earnings.
The hidden risk to the economy in corporate balance sheets

NEW YORK (AP) — America has a debt problem, but it’s not what you think.
Yes, the federal government owes trillions of dollars more than it did a few years ago. Yes, Americans are still struggling to pay off mortgages and student loans. But it’s the buildup in debt elsewhere that is most worrying some experts, and the big borrower this time may come as a surprise: Corporate America.
You might think big U.S. companies, if anything, have been too conservative with their finances. They’ve collectively hoarded hundreds of billions of dollars in cash, instead of spending it to hire workers or expand their operations.
The reality is different, and more worrisome. Much of the cash is held by just a precious few companies, while debt is ballooning at other, weaker businesses as investors desperate for income rush to lend to them. These investors could face losses, perhaps steep, if economic growth falters. The broader economy is also vulnerable because companies with more debt have to cut back further and lay off more whenever downturns hit.
“There’s a misconception that companies are swimming in cash,” says Andrew Chang, a director at S&P Global Ratings. “They’re actually drowning in debt.”
It turns out there’s a wealth gap among companies, just like among people. Of the $1.8 trillion in cash that’s sitting in U.S. corporate accounts, half of it belongs to just 25 of the 2,000 companies tracked by S&P Global Ratings. Outside of Apple, Google and the rest of the corporate 1 percent, cash has been falling over the last two years even as debt has been rising. It now covers only $15 of every $100 they owe, less than it did even during the financial crisis in 2008 when finances were crumbling.
You don’t have to look hard to find other signs of trouble.

Traders are betting big on a stock market shock

Volatility traders haven’t been this sure of a stock market shock in almost two years.
These investors buy and sell options on the CBOE Volatility Index, or VIX, as they predict swings (or a lack thereof) in the S&P 500. The VIX typically spikes when stocks decline and falls in a steadily rising market. And right now traders are not betting that things will stay quiet.
The cost of bets on a quiet market — used either as hedges by traders who expect volatility or as directional wagers on fewer price swings — is lower than it has been at any point since October 2015. That’s relative to the cost of an increase.
In other words, volatility traders have taken the restrictor plates off their bullish VIX bet and are fully embracing the idea of a stock market shock.
This degree of confidence over increased turbulence has manifested itself in the exchange-traded-fund market. That’s home to the iPath S&P 500 VIX Short Term Futures ETN, the biggest and most heavily traded VIX-linked product, which absorbed a net $219 million last month. To put the inflows in context, consider that the long-VIX instrument saw a $41 million outflow in the six weeks leading up to July.

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