The Nasdaq plunged by the most in over 8 months today and broke all the way back to unchanged from the December taper decision of the Fed. All major US equity indices are now negative from the time the Fed decided to slow its flow of free money. The Dow closed below its 200DMA for the first time since December 2012. The S&P 500 closed the furthest below its 100DMA since QE3 started. USDJPY was in charge and everything was higher or lower beta off of that as it broke 102 early then 101 later in the day (with the Nikkei -700 points from the day's highs). Treasuries rallied around 5bps to fresh 7-month low yields for 30Y. Gold and Silver surged, adding 1% on the day as the USD lost 0.25% on the day (led by the 1% strength in the JPY). VIX smashed to 14 month highs over 21%. Credit deteriorated but stocks are catching down.
US equities are pressing fresh lows of the day as USDJPY tests 101. The Nasdaq just broke 4,000 - its worst drop in 8 months; The Dow trading back under its 200DMA; and now every major index is in negative territory from the December Taper. Most notably though, Treasury yields are tumbling as weak data and safe-haven flows have pressed 30-year yields to their lowest sicen July 5th 2013. VIX is trading 20.7% - its highest in 4 months.
At one time it was the tough that got going when things started to get rough. Now, it’s just the money-minded that look, watch, and act before you know what has hit you.
Despite every talking head having written off the miners, they were the best performer across US equity sub-indices. In the US equity markets Biotech and REITs also performed well. On the other hand, Nasdaq Insurance and NYSE Arca Oil ETF were the worst...along with the NYSE Composite Index (which represents 61% of all global market capitalization).
Another volatile day ended with the Dow is down around 5% in January - the worst start to a year since 2009 (and 2nd worst since 1990) and the worst month since May 2012 (a 3-sigma miss of the average +1.5% per month gain since 2009's lows). Japan, Brazil, and Russia suffered greatly on the month as gold miners, Egypt?, and US Biotech did well. There is a huge 380bps spread between the performance of the Industrials and the Transports YTD. Gold had its best month in the last 5; Treasuries rallied with 10Y yields dropping their most since May 2012; USD rallied the most in 8 months with JPY's biggest rally (and Nikkei's biggest loss) since April 2012.
Despite the best efforts of CNBC to have every bull on Amazon explain how great it really is and how they could enable to magical profit machine any minute if they so choose, the hedge fund hotel stock du jour is now down 10% and Bloomberg headlines blare:
*SEC Short Sale Rule 201 is in Effect : AMZN (NASDAQ)
Last night's algo-ramp to VWAP (on rising Prime prices?) is a long-distant memory now...
UPDATE: The miss by GOOG and AMZN (accounting for 13% of Nasdaq market cap) is pushing indices lower after hours...
The S&P 500 And Russell bounced once again off post-December-Taper unchanged levels today but the Dow remains flat from 12/18 as the Nasdaq (led by exuberance in momo social media stocks as AAPL closed <$500) jumped the most in almost 4 months (though remains -1% on the year). The rally in stocks was simply remarkable for its tick-for-tick tracking of USDJPY and EM FX and the S&P was unable to make significant progress past its pre-Turkish-rate-hike levels. Treasuries sold off but remain 3-5bps lower in yield than when Turkey was "fixed". The USD rallied on EUR and JPY weakness (but was almost entirely dead once Europe closed). Precious metals were manhandled instantaneously lower at 8amET then spent the rest of the day trying to recover. Stocks did tumble into the close to recouple with USDJPY but bad news was great news it seems...(for now)
Asset-gatherers and talking-heads are in full panic mode. Stocks tumbled ince again today and there was very little "off the lows" talk. The "turmoil" panic in the hearts and minds of every Wall Street strategist palpable as the Fed failed to save us from another down day. Trannies, Russell, and the Dow are down around 5.5% from their highs; the S&P down around 4%; and the Nasdaq around 4.5% from its multi-year highs last week. Today's plunge of over 35 points the S&P futures from the "where are all the sellers, EM is fixed" post-Turkey highs at 1801 is a very sizable outside range day. Of course it was all about the ongoing unwind of levered JPY carry trades as 102 becomes crucial to any bounce in stocks. VIX rose 1.7 vols to 17.5%; credit spreads popped notably wider post FOMC; EM FX turmoiled considerably lower and while the USD was stable (there was plenty of puking in AUD and JPY). Treasury yields tumbled to fresh 10 week lows (10Y -8bps at 2.66% at the lows). Gold and silver rallied post-FOMC and recovered yesterday's monkey-hammering losses.
If the Fed doesn't "save us" this afternoon - I don't know what will.
Beginning by disavowing Mario Gabelli of any belief that rising stock prices help 'most' people, Marc Faber discusses his increasingly imminent fears of the markets in this recent Barron's interview. Quoting Hussman as a caveat, "The problem with bubbles is that they force one to decide whether to look like an idiot before the peak, or an idiot after the peak. There's no calling the top," Faber warns there are a lot of questions about the quality of earnings but "statistics show that company insiders are selling their shares like crazy." His first recommendation - short the Russell 2000, buy 10-year US Treasuries ("there will be no magnificent US recovery"), and miners and adds "own physical gold because the old system will implode. Those who own paper assets are doomed."
Despite AAPL's tumble (and Seagate), the NASDAQ ended the day green along with the rest of the major US indices as the Dow broke its 5-day losing streak. Stocks in general recovered from the pre-Taper levels but remain notably down on the year. Most of the day's gains occurred in the first hour of the day as "most shorted" names were ripped higher (+1.8% vs the market's +0.75% at 11ET) which helped the Trannies outperform. The USD oscillated once again but ended practically unchanged (on the day and week) as AUD strengthens and JPY weakens providing just enough support to hold stocks higher. The USD stability was entirely missing from commodities which cracked around teh durable goods data with oil surging and bullion bulls purging. Treasuries were mixed but practically unchanged (despite some notable volatility around the Dur Goods data) with very modest steepening. VIX dropped 1.6vols to 15.8% - its biggest drop in 6 weeks.
So much for the only silver lining in Q4 and Nasdaq leadership from AAPL. Moments ago AAPL reported results which beats on the top and bottom-line, reportined revenues of $57.6 billion in line with the expected $57.5 billion, and EPS beating modestly at $14.50 vs Exp. $14.07 mostly thank to the retirement of 46 million diluted shares from a year ago. However the good news ended here, with the one thing the market was focusing on - iPhone sales - missing badly, as the company only sold 51 million iPhones in the quarter of the 5S release, compared to expectations of 54.7 million. Additionally, Apple also guided to lower revenues than the street had expected, and is now seeing $42-44 billion in the next quarter compared to consensus estimates of $46.1 billion and for all those calling for the demise of the US consumer - you may be right: AAPL Americas revenue declined by 1% from a year ago, when AAPL also had a new product launch. Is AAPL's largest market starting to say "meh"?
During the first minute of trading on January 27, 2014 there were wild price swings in at least 11 stocks: symbols BKH, GEB, HAYN, UBSH, WSBC, FLIC, EFF, GABC, BBOX, SP and TPZ. We know this because about 90 minutes later, Nasdaq canceled trades in these symbols citing the clearly erroneous transaction rule 11890(b). However, as Nanex shows in its usual great (and imperceptible to the SEC) detail, these trades appear anything but erroneous... we can only imagine who the market-maker algo belonged to that the Nasdaq canceled all of these trades...Goldman?
Following the European close, US Treasuries sold off with yields rising 4-5bps (though 2Y outperformed, rising only 1bp on the day) despite chaotic panic selling in the March T-Bills. Stocks dead-cat-bounced with the same timing - find the day's lows around the European close as the S&P and Russell lost all their gains from the Taper decision over a month ago. This is the first 5-day losing streak for the Dow since September. Once the indices had reached unchanged and removed some stops, the selling began as despite a lower close for VIX (after tagging 18% early in the day), stocks tumbled into the close. The USD ended the day unchanged, despite major swings in AUD, CAD (higher) and JPY lower. Commodities slipped lower all day with some 'normal' illiquid moves led by weakness in Gold and silver.