Bursting Biotech Bubbles And Calendar Concerns Club Stocks/Bonds

Tyler Durden's picture

Quad-witching only added to an extremely volatile week as the entire bond, stock, FX complex pumped and dumped on the basis of whether a "considerable period" was really six months and whether "quite some time" was more or less than six months. The S&P hit record highs early on this morning thanks to a ramp in AUDJPY (but once again bonds didn't blink). All that ended when Europe closed and the Biotech sector's weakness spread, leaving the Nasdaq -1.4% post-FOMC (and all other indices in the red post-FOMC). The range of moves in bonds, FX, commodities, and vol this week were impressive as we noted below...


Year-to-date, gold remains the winner (and HY credit the loser)...


Year-to-date, the Dow is back in the red and Russell outperforming...


To summarise this week's carnage...

  • 2Y Yield +8bps - the worst week in 9 months
  • 5Y Yield +17bps - the worst week in 7 months
  • 30Y Yield unchanged
  • 5s30s -16bps - 2nd biggest flattening in 21 months
  • 2s10s unchanged
  • Silver -5.2% - the worst week in 6 months
  • Gold -3.3% - the worst week in 4 months
  • Copper ~unchanged (down 4 weeks in a row)
  • USD Index +0.83% - best week in 2 months
  • EUR -0.82% - broke 6-week win streak
  • VIX -2.8vols - 2nd biggest drop in 14 months
  • Nasdaq Biotech Index -2.8% - worst week in 5 months
  • Financials unchanged on the week


When the bottom fell out... as Europe closed...


Post-FOMC, all indices are now in the red...


With only financials holding any gains...


Bear in mind that financial stocks will rally into the capital announcements (as it has done for 3 years) but credit is weaker and not confirming this move at all...


Notably, "most shorted" names have been very weak since the FOMC - even as the broad market is pumped on the heels of financials...


On the week 30Y is practically unchanged while 5Y is +17bps!


FX markets were also volatile with EUR and JPY weakness (but AUD relatively outperforming)...


Gold has been limping higher thelast 2 days but on the week PMs remain under pressure with oil and copper around unch...


Charts: Bloomberg

Bonus Chart: The MoMos no likey Ms. Yellen...


Bonus Bonus Chart: Biotechs battered...by most in almost 3 years today

U.S. lawmakers have asked Gilead Sciences Inc to explain the $84,000 price tag of its new hepatitis C drug Sovaldi, which is encountering resistance from health insurers and state Medicaid programs - spraking concerns they may have a harder time pricing new medicines.

It seems like the government is basically going after externalities from yet another bubble sector likely bursting the bubble


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101 years and counting's picture

let the long awaited correction finally begin.  spx down 1% from intraday high. same as every other bubble bursting top.

camaro68ss's picture

Meh, it will all be green for the year by Mondays end. BTFATH

flacon's picture

When does silver get to crash? ..... oh wait... 

Rainman's picture

Let's hear it for a quarter ending goose to the 2 and 20, boyz ... yeah !

Soul Glow's picture

Should I be worried about Bear Stearns?

No no no.  Bear Stearns is fine!  Bear Stears is not in trouble.  Don't move your money from Bear!  That's just being silly!  Don't be silly!

Bear Stearns is Fine:


Dr. Engali's picture

You forgot your sarc tag. When this thing finally blows up it will be down a lot more than 1% from a record intraday high.

Murf_DaSurf's picture




The new Patent Law w/ the "New"Re-examination Trial board is destroying Bio-Patents, wholesale.

Don't own any biotech backed by US Patents

Kaiser Sousa's picture

what is one of the most pronounced traits of a sociopath???

they r pathological liars....

WASHINGTON (MarketWatch) -- The Federal Reserve late Friday corrected the results of the stress test, citing inconsistencies in the treatment of the fourth quarter 2013 actual capital actions and assumptions about preferred and employee compensation-related issuance. Though most firms saw no or little change, one firm, American Express AXP +0.82% , saw a 0.5% decline in its minimum Tier 1 capital ratio under the severely adverse test, while two firms saw 0.3% gains, Northern Trust NTRS -0.01% and M&T Bank MTB +0.74% . The results still show 29 of the 30 firms tested with a minimum Tier 1 capital ratio above 5%."


ebworthen's picture

Yeah, look at those financials go, now you know who QE was for and who will get bailled out AGAIN.

asteroids's picture

Remeber in 2008/2009 they made the financials impossible to short and were the last to break down before the big waterfall. Maybe this is the same?

NDXTrader's picture

Ehhhhhhhh.....what am I missing here. Was Kuroda's speech at the London School of Economics not on Bloomberg? He said that they have many tools to exit QE and would like to do so by the end of the year. It appears the Reuters version of the story conveniently left the last part out. That is the story of the day...week...month...year?

skwid vacuous's picture

so many hypothetical tools to exit QE - but never been attempted on this scale ...

FuzzyDunlop21's picture

Shame on you John Martin, you did not pay off your local representative before putting the drug to market. Seriously, Medicare pays for operations way less effective and way more expensive, but Im suppose to believe these Congressmen have suddenly decided to get God? Yea right

skwid vacuous's picture

Chief Kosher Lakota watches spring pathways of buffalo and hawk ... signs are bullish, u buy now or regret...

FieldingMellish's picture

Holy Biotech Bubbles Bursting, Batman!

drinkin koolaid's picture

Yes, it's the weather!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

ronron's picture

it's never too cold for drugs.

Tsar Pointless's picture

"Not off the lows." Exactly what I thought when I looked at the end-of-day results of the casino.

Maria Bartiromo - whom I haven't watched in at least four years - must be crying in her glass of Warren Buffett's cum.

skwid vacuous's picture

well folksh we're in the final shhtretch here and shhtocks are well off their lows - M. B.

soopy's picture

S&P 'plunging' a massive 17 handles off its highs and no deer in the headlights?? What is this blog coming to?

Yen Cross's picture

    Bonus chart. Lot's of Biotechs and Tech. junk on this index.

BullyBearish's picture

Famous trader once said, "When I want to sell $500M, I first buy $100M."  Big money looking for bagholders.