From Goldman's sales and trading team:
Equities off across the board with all sectors down and 96% of the SPX components closing lower – before today we hadn’t closed below 1800 since December 17th. Unlike earlier down days this year, today was very active and we had interest to buy/rotate names on the move lower. Telecom fares best, ‘only’ down 1%, while Industrials were down 3.1%. Good news is there’s only 1 week left to January. Closes: SPX -2.09 % to 1790.29; DJIA -1.96% to 15879.11, NASDAQ -2.15% to 4128.17.
The VIX up sharply +4.37 to 18.14.
USDJPY continues its pullback -0.85% today almost breaking 102 before stabilizing around 102.30 and AUD continues to melt lower -1% to fresh cycle lows. Day two of EM underperformance as TRY, RUB and ZAR all end more than 1% weaker and risk-off sentiment washed into other asset classes. EUR stable and nearly unchanged on the day, CHF +0.30%, and GBP -0.7%.
The rally in Treasuries continued with 10s closing another 4bps stronger and 2y1y rallying 4bps as well compared to yesterday’s close. Flows were light relative to the price action as it felt like most of the activity took place in futures. That said, we did see continued front end buying from foreign accounts along with short-covering from fast money. There was little interest to set new shorts. Next week the FOMC meeting will be closely watched.