Dow Surges To Best Year Since 1995 As Bonds & Bullion Slump

Tyler Durden's picture

2013 is in the books... and quite a year it was...

  • Fed Balance Sheet +39%
  • Dow Transports' best year since 1997 +39%
  • Russell 2000's best year since 2003 +37%
  • S&P 500's best year since 1997 +29%
  • Dow Industrial's best year since 1995 +26%
  • USD, WTI Crude, and Treasury 5s30s curve Unchanged
  • 30Y Bonds' worst year since 2009 -13%
  • Gold's worst year since 1981 -28%

The last few days have seen VIX rising, stocks limp higher (with a mini melt-up into the close today), bond yields higher, and the USD lower.

 

Today was noisy in most asset-classes - precious metals collapsed and soared; VIX continued to surge; Treasury yields dipped then ripped higher into the close; and stocks ripped to new record highs and then dropped unceremoniouslyonly to be ramped handsomely to their highs... but the last few minutes were insane...

 

2013 was a tough year for PMs and a 'special' year for Stocks with the USD unchanged...

 

But in context - from the October 2007 peak in stocks...

 

Materials were the only sector that at some point saw a negative return on the year... otherwise the sectors never looked back...

 

While VIX is well down on the year (-20%) - from fiscal cliff anxiety at the start - the last few days have seen protection very well bid in a major divergence from stocks into the new year... (of course today's late-day ramp was 'funded' by a VIX dump)...

 

Commodities were a little crazy today - as usual since the Taper (and before) - with precious metals dumped and pumped intraday on very heavy volume...

 

Treasuries pushed notably higher in yield into the close but the belly remains the big underperformer post-Taper

 

 

There is one index of "risk" that has surged this year - ever so quietly and away from the calming eye sof Bob Pisani, SKEW (which 'measures' the options market's perceptions of large moves - as opposed to VIX which measures the market's view of 'normal' moves) has risen dramatically...

 

Charts: Bloomberg

Bonus Chart: The Bond Market's demise (in context)... It would appear the mainstream media has decided that anyone who held bonds this year (and continues to do so) must, by logical deduction since stocks were up 30%, be the greater fool. However, as we have noted in the past, there is a reason why gentlemen prefer bonds (sometimes) and a little context for this year's total return in US Treasuries might help manage the message a little better. Based on IBOXX USD Treasuries index, bonds lost 3.12% total return... not exactly cliff-jumping time... but then again who knows what comes next...

 

Bonus "New Year Special" Chart: The only thing that mattered this year...