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Bonds Bruised As Stocks Bounce Off Fresh 2014 Lows

Tyler Durden's picture




 

UPDATE: Once again the S&P 500 tumbled as soon as the cash market closed...

 

Thanks to a bounce off 101.00, USDJPY supported yet another marginal bounce off fresh 2014 lows in US equities (led by a heavyily turmoiled Russell this morning following the better than expected ISM Services). Nasdaq and Trannies bounced off its 100DMA and the Dow rallied back to modestly green and tested the 200DMA from below. The ubiquitous late-day ramp attempt failed and the Dow lost its marginal green color into the close; Trannies and Russell underperforming. Notably though, despite stocks ending flat to down, Treasury yields surged 6-8bps off post-ADP lows (and 3-4bps up on the day). Gold and silver spiked on the weak ADP data and faded back on the day with Silver outperforming on the week (+3.5% vs 1.1% gold). Credit and VIX once again were not playing ball this afternoon and diverged from stock's bounce but we do note that equities are showing notably more volatilty relative to FX carry in the last 2 days. YTD: Dow -7%, Russell -6%, S&P -5%, Nasdaq -4%

 

Year to date...

 

On the day, early weakness bounced back to unch by the close for the Dow but the late-day ramp attempt failed to hold gains...

 

But as seen - the drop in stocks was also coincident with a 101 JPY and that triggered a bounce...

 

Equity markets once again played a more volatile game than credit...

 

VIX diverged in the afternoon (after Europe's close)...

 

Treasuries staged a notable sell-off off the knee-jerk rally after ADP...

 

Commodities saw yesterday's trend continues as Silver's underperformance post-Taper is unwound...

 

FX markets were very quiet ahead of tomorrow's ECB meeting.

 

Charts: Bloomberg

Bonus Chart: @Not_Jim_Cramer shows why the recent exuberant sentiment in stocks was misplaced and has rapidly reverted lower (removing notable support for further multiple expansion hopes)...

 

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Wed, 02/05/2014 - 17:14 | 4405475 Winston Churchill
Winston Churchill's picture

First double POMO failure.

Looks like Mr. Yellen will need a $150bn a month untaper, to stick

save the 'market'.

Oh well, who needed the USD anyways.

Wed, 02/05/2014 - 17:26 | 4405525 DoChenRollingBearing
DoChenRollingBearing's picture

Again indulged in my new cheap hobby:

BOUGHT some "junk silver" today!

Found a 1929-S Standing Liberty Quarter and an 1898 Barber Quarter (they let me sort through the pails at my LCS).

Wed, 02/05/2014 - 17:16 | 4405482 Dr. Engali
Dr. Engali's picture

Friday is going to be interesting if this is the best that Kevin can pull off today.

Wed, 02/05/2014 - 17:26 | 4405529 Winston Churchill
Winston Churchill's picture

I can hear the davits for the lifeboats creaking from here.

Wed, 02/05/2014 - 17:48 | 4405631 Levadiakos
Levadiakos's picture

What's all this about trannies?

Wed, 02/05/2014 - 17:53 | 4405646 Winston Churchill
Winston Churchill's picture

Ask the SEC.

Midget ones are their speciality.

Wed, 02/05/2014 - 17:16 | 4405490 doggis
doggis's picture

I ABSOLUTELY JUST LOVE READING THE DAY END WRAP UP - ALOUD, AND WITH A SOUTHERN ACCENT!

THE WRITIN' JUST ROLLS OFF THE TONGUE WHEN UTILIZIN A SOUTHERN ACCENT, AND IT MAKES EVERYTHANG SOUND SO "GONE WITH THE WIND"!

 

 

Wed, 02/05/2014 - 17:20 | 4405501 NOTaREALmerican
NOTaREALmerican's picture

Everything sounds better in French.   Translate page to French and then read it aloud with a southern accent!

Wed, 02/05/2014 - 17:20 | 4405503 madbraz
madbraz's picture

$100 billion in reverse repos again today.

Wed, 02/05/2014 - 17:26 | 4405534 T-roll
T-roll's picture

Maybe this a calculated sell off to get Treasuries lower in an attempt to revive the housing sector before the buying season?

Wed, 02/05/2014 - 18:02 | 4405677 Rainman
Rainman's picture

Agree....uber-leveraged real asset deflation is like kryptonite at this stage of the ponzi....didn't work out too good today tho

Wed, 02/05/2014 - 18:05 | 4405684 pragmatic hobo
pragmatic hobo's picture

double pomo + ppt = up

Wed, 02/05/2014 - 18:59 | 4405878 OC Sure
OC Sure's picture

The title here may be a slight bit misleading. There may be a tremendous change going on with respect to correlation. Bonds and stocks are moving in tandem for the first time in at least a year it seems. This disconnect is only 2 days old and should make the prudent speculator act accordingly. GFL.

Wed, 02/05/2014 - 20:08 | 4406129 LooseLee
LooseLee's picture

What if both equities AND bonds have entered a bear market as many deflationists espouse? Interesting times we live in, indeed! Position accordingly!

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