Treasury Yields Tumble To 2-Month Lows; Dow/S&P Still Red In 2014

Tyler Durden's picture

JPY crosses were in charge of stocks again today - and not in a good way - as a sideways market gave way to weakness late on as Goldman released part two of their market-bashing research. With the dramatic help of AXP and V (78 of the Dow's 41 points!), the Dow was the only index green today and managed to close just green on the week. Since the taper, Homebuilders have tumbled from heroes to almost zeroes (+1.5% from +6.5% at year-end in spite of the big drop in TSY yields in recent weeks) with Healthcare outperforming (+5.5%). Away from stocks, things were also escalating rapidly this afternoon. Treasury yields limped lower all day then dropped notably starting around 1445ET with 30Y -5bps on the week (and 5s30s at 212bps - the flattest term structure in 4 months). The USD rose on the day (up 0.75% on the week) led by EUR weakness (JPY was relatively stable). Despite the USD strength, gold and silver closed green on the week (+0.25% and+0.7% respectively) but WTI crude led the way up 1.5% on the week at $94.10. Despite valiant efforts to VIX-slam the market higher into the close, the S&P closed red and VIX +0.6vols higher on the week at 12.7%


Interestingly, stocks flip-flopped around the European close/POMO between USDJPY and AUDJPY/EURJPY... caught down to it by the close...


Year-to-date, the Dow is the underperformer but the last hour or so today saw the other major indices pressing aggressively lower...


On the week, the NASDAQ and Russell closed green, Dowsmall green, and S&P and Trannies lower...


Since the taper, there has been some notable rotation across sectors with homebuilders the most notable...


Credit markets dropped the hint early that all was not well in equity land...


As did VIX...


US Treasuries rallied almost non-stop since the post-inflation data spike on Wednesday (with a mini spike higher in yields this morning) - 5s30s are now at 4-month flats and 2s10s at 6 week flats...


With 30Y bond yields at their lowest in over 2 months...


The USD rose notably on the week (JPY was unch - irnoically the same as stocks...) - led by EUR weakness (and that smack down in AUD on the back of dreadful jobs data)...


Despite that USD strength, commodities all closed green on the week...



Charts: Bloomberg

Bonus Chart: The Treasury curve flatteniung is being ignored for now by the banks (where's my NIM?) but dragging builders lower...

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Black Forest's picture

Where's the bonus chart??

fonestar's picture

So should I sell my bits and go into debt?

new game's picture

hey fonestar is that you- the net prophet? or pete?

anyways, you is gonna do what cha gonna do.

more and more getting on the wagon.

'it could happen' as they say bout the lottery up here in mn.

good luck to ya.

you take a licken but ya come back kicken...

pragmatic hobo's picture

so when do we start talking about the upcoming yellen's first fomc meeting?

ebworthen's picture

Healthcare outperforming; gee, I wonder why?

Bend over citizen!

q99x2's picture

How low can the trannies go.

gsh1976's picture

The Dow was up 17.99 at the close and then changed to up 41.55 at 4:15.  It is amazing how many times that happens.  It must be magic.

gsh1976's picture

The Dow was up 17.99 at the close and then changed to up 41.55 at 4:15.  It is amazing how many times that happens.  It must be magic.

Kaiser Sousa's picture

yeap saw that bullshit too...

and Gold and Silver traded sideways all day until........................

the London and Comex close....strange - thats never happened b4.......

yogibear's picture

William Dudley of the NY fed was off today. He'll be back next week pushing the buy buttons again.

Wait What's picture

anything less than a 30% correction in equities this year would be uncivilized

CrashisOptimistic's picture

You know, when economic activity is eroding there is no demand for loans.  When demand weakens for something, you have to cut its price to get it to move.

And hence, interest rates fall.

shawnmike's picture

lending money against depreciated assets (houses) where the mortgage borrower has a good credit history is about the safest investment you can get, especially compared to a society that elects a government that is corrupt and is otherwise creating mountains of debt that impoverish multiple generations of least the ones paying the mortgages are reducing the amount of debt that they owe.