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European Equities End Ugly Week With Credit Unchanged

Tyler Durden's picture




 

The exuberant OMT-driven froth of the European equity markets appears to be fading. All major stock indices across the region ended the week red - with Spain worst down 3.3% and Italy down 2.2% (though as CNBC would say - off their lows). This looks like catching-down to European sovereign's less sanguine view of the world as Italy and Spain sovereign bond spreads end almost perfectly unchanged (having been up 15bps and 25bps respectively mid-week). Corporate and financial credit spreads outperformed equities on the week - ending unchanged also - with most of the move occurring today. Interestingly, the LTRO stigma is rising once again - as non-LTRO-encumbered bank credit spreads hit a 14-month low this week and the spread to LTRO-banks widens.

 

European stocks red on the week - led by Spain...

 

but Sovereigns end unch...

 

While stocks are underperforming credit markets today to end the week...

 

but its non-LTRO financials that are leading the way...

 

Europe's VIX...

 

Charts: Bloomberg

 

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Fri, 10/12/2012 - 12:00 | 2881921 PUD
Fri, 10/12/2012 - 12:07 | 2881953 Colombian Gringo
Colombian Gringo's picture

Hang all euro banksters, NOW!

Fri, 10/12/2012 - 12:10 | 2881969 No Euros please...
No Euros please we're British's picture

But, but, but........they promised..... they would do all it took, and I believed them.....

The European Stability Mechanism lacks the cash to bail out Spain if the country asks for help before the end of the year, despite the rescue fund’s official inauguration last week and the injection by 17 member states of EUR 32bln of capital.

Fri, 10/12/2012 - 12:03 | 2881935 Dr. Engali
Dr. Engali's picture

We need some market chaos going on. The comments have been a little slow today.

Fri, 10/12/2012 - 12:13 | 2881975 Mark Carney
Mark Carney's picture

I love lamp!

Fri, 10/12/2012 - 12:04 | 2881937 LongSoupLine
LongSoupLine's picture

 

 

This is fucking ridiculous!  Doesn't the "market" know the EU just won the Nobel?!  This is obviously a bullish event damn it!

Fri, 10/12/2012 - 12:09 | 2881962 slaughterer
slaughterer's picture

ES tested the 50DMA at Euro close today.  Now we can rally again.  /snarc  

Fri, 10/12/2012 - 12:26 | 2882024 No Euros please...
No Euros please we're British's picture

The article from IFRE about the Spanish bailout and ESM is well worth a read, it cuts through a lot of the bullshit coming from the EUs finest unelected sociopaths.

http://www.ifre.com/esm-lacks-cash-for-spanish-bailout/21046572.article

Fri, 10/12/2012 - 12:58 | 2882143 Silversem
Silversem's picture

The perfect environment to make a shitload of money trading Forex!!

Fri, 10/12/2012 - 13:04 | 2882159 GoldbugVariation
GoldbugVariation's picture

The charts are good as always, but the headline and commentary in this article are a bit ridiculous this time.  European equity markets were up an unsustainable 5% in two days at this point 1 week ago, so this is hardly an "ugly week", just a bit of normalization setting in.

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