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Goldman Summarizes The Rout: "Derisking Is The Name Of The Game"

Tyler Durden's picture




 

From Goldman's Sales & Trading Team,

The equity rout continued. Growth tech names felt the heat once again as Nasdaq led the way down, but the weakness was truly wide spread as all sectors ended in the red – both in domestic and overseas developed markets. Earnings season continued, but derisking is the name of the game in these markets. Financial feel the most pain (-1.1%) on a headline earnings miss, while Oil&Gas and Utilities finished at the top of the pack with only minor weakness. Closing levels SPX -1.0% to 1815.69 (-2.9% for the week); DJIA -0.9% to 16026.75 (-2.4% week); Nasdaq -1.3% to 3999.73 (-4.3% week).

The VIX marches higher +1.23 to 17.12.

Negative sentiment in equities gave way to a quieter day in FX. The majority of G10 near flat on the day, with light flows. USDJPY drops to a low of 101.38 but recovers to trade above 101.50 for most of the day with little trading post ‘BOJ GOVERNOR KURODA: JAPAN ONLY HALFWAY THROUGH MEETING BOJ'S PRICE TARGET’. EURUSD also unchanged despite dovish central bank commentary, with no reaction from headlines ‘ECB'S COEURE SAYS THE STRONGER THE EURO THE GREATER THE NEED FOR MONETARY ACCOMMODATION’. Elsewhere in EM, BRL is the outlier down -0.60% as any gains reversed intraday as the currency played catchup to its peers.

10y treasuries traded in a 2bp range during NY hours on a fairly quiet day. Flows in cash were a combination of real money selling in the long end and fast money selling in the belly, while in swaps we saw some risk-off hedges in the form of back end receiving.

Gold chopped around within a $10 range in the London session and then within a $4 range once NY got it.  The only interesting element to the precious complex today was a steep 1.53% rally in palladium which occurred after headlines flashed stating “NATO SEES PUTIN SEEKING FULL UKRAINE OCCUPATION, BILD SAYS”, Brent rallied along with palladium on the headline but ended up down on the day following a very weak close.  Nickel maintained its recent momentum trading up another 2.31%, nickel has advanced almost $1000 in the last 3 trading sessions.

 

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Fri, 04/11/2014 - 17:39 | 4649157 icanhasbailout
icanhasbailout's picture

This is the point in the game "chicken" where the guy who chickens out first next discovers his steering has gone out.

Fri, 04/11/2014 - 17:45 | 4649185 Miffed Microbio...
Miffed Microbiologist's picture

Playing chicken with a train is truly exciting but never smart.

Miffed;-)

Fri, 04/11/2014 - 17:49 | 4649200 Manthong
Manthong's picture

Rout, Schmout..

Wake me when we are back down to SnP 1500.

Fri, 04/11/2014 - 18:18 | 4649296 DavidC
DavidC's picture

Spot on Manthong.

The Dow is back where it was...on the 17th of March. Hardly a rout.

DavidC

Fri, 04/11/2014 - 19:58 | 4649537 asteroids
asteroids's picture

A rout is VJET going from 50 to 15. Now, if the QQQ was to go from 91 to 30, that would be a rout.

Fri, 04/11/2014 - 20:48 | 4649696 Theosebes Goodfellow
Theosebes Goodfellow's picture

De-risking!?!

Rout?!?

How about being able to run fast enough to stay in front of the stampede?

BTW, VJET lost another 18.6% just today.

Must be a bleak future for 3D printing in German or something.

Fri, 04/11/2014 - 17:59 | 4649234 fonzannoon
fonzannoon's picture

Enough with this GS stuff. Miley Cyrus hurt her back. She's out on twerkers comp.

Fri, 04/11/2014 - 20:52 | 4649707 Theosebes Goodfellow
Theosebes Goodfellow's picture

Ouch. Now that hurt, fonz. The scary mental image of that though is her twerking an audience when she's seventy.

(How's that for paybacks?)  ;)

Fri, 04/11/2014 - 17:47 | 4649190 Thought Processor
Thought Processor's picture

 

 

Exactly.   +100 for a good analogy.

 

And after the crash you fall off a cliff directly into a MyRA account which supposedly 'saves' you.

Fri, 04/11/2014 - 17:48 | 4649197 BlindMonkey
BlindMonkey's picture

Never, ever play chicken while driving a GM vehicle. 

Fri, 04/11/2014 - 18:03 | 4649248 MillionDollarBoner_
MillionDollarBoner_'s picture

"You ALWAYS play chicken while driving a GM vehicle." 

There...fixed it fer y'all ;O)

Fri, 04/11/2014 - 17:41 | 4649169 syntaxterror
syntaxterror's picture

"derisking" aka the FED isn't bailing us out at the current moment

Fri, 04/11/2014 - 17:49 | 4649188 ebworthen
ebworthen's picture

Exactly.

No shortage of FED bafflement speak - but the fact is that Wall Street is -$20 Billion per month of FED gravy.

Fri, 04/11/2014 - 17:44 | 4649177 i_call_you_my_base
i_call_you_my_base's picture

"Derisking." A stupid economists / analysts way of saying selling hard.

Fri, 04/11/2014 - 17:45 | 4649184 Peter Pan
Peter Pan's picture

Perhaps with MyRa the government will be able to impose some crowd control.

Fri, 04/11/2014 - 17:47 | 4649191 Doubleguns
Doubleguns's picture

That will be simply directing them away from the exit and into the closet. 

Fri, 04/11/2014 - 18:22 | 4649303 Peter Pan
Peter Pan's picture

The way it looks to me Americans have already been closetted and they think that looking through the keyhole is watching TV.

Sat, 04/12/2014 - 11:10 | 4650887 icanhasbailout
icanhasbailout's picture

"this way to the egress"

Fri, 04/11/2014 - 17:49 | 4649201 BlindMonkey
BlindMonkey's picture

I am picturing the market equivalent of water cannons and rubber bullets.  

 

 

Yikes. 

Fri, 04/11/2014 - 17:56 | 4649220 Doubleguns
Doubleguns's picture

 bullets.  Fixed it.

Fri, 04/11/2014 - 17:56 | 4649224 buzzsaw99
buzzsaw99's picture

equity rout. lulz

Fri, 04/11/2014 - 17:59 | 4649233 Yen Cross
Yen Cross's picture

   Here's the FX >COT numbers for anyone interested.

 
Forex futures market speculative positioning data from the CFTC Commitments of Traders report as of the close on Tuesday, April 8, 2014:

    EUR net long 23K vs long 33K prior
    JPY net short 87K vs short 88K prior
    GBP net long 46K vs long 34K prior
    AUD net long 3K vs short 4K prior
    CAD net short 34K vs short 37K prior
    CHF net long 11K vs long 14K prior
    NZD net long 20K vs long 18K prior

Fri, 04/11/2014 - 18:37 | 4649356 Pareto
Pareto's picture

Nothing to see here folks, move along.

Fri, 04/11/2014 - 19:29 | 4649469 I Write Code
I Write Code's picture

Derisk this, mutha.

But the technicals are not even to the point of correction yet, so far this is just a BTFD.  I hope you will all go out this weekend and sacrifice a virgin to Yellen and keep it that way.  Kind of like The Hunger Games only moreso.

Fri, 04/11/2014 - 20:27 | 4649623 Ban KKiller
Ban KKiller's picture

Disposible income has been disposed. Now just basics are being purchased,unless you are the super rich. Everyone else is on a budget. So...what do people on budgets buy? Silver and bullets, of course. 

Banksters spout the craziest shit, mainly about their accounting abilities. 

Fri, 04/11/2014 - 22:29 | 4649981 Kelley
Kelley's picture

One has to wonder how much of this collapse is due to the high frequency rigging expose featured on "60 Minutes?"

A lot of investors probably decided not to play any more ...to stop being the suckers for the HF riggers who have been stealing their money.

Sat, 04/12/2014 - 07:46 | 4650605 Iam_Silverman
Iam_Silverman's picture

Could it be that instead of setting their clocks ahead one hour, some folks set their calendar ahead one month and think this is May?  Time to go away?

Sat, 04/12/2014 - 14:18 | 4651484 Last of the Mid...
Last of the Middle Class's picture

It's been any fucking risk whatsoever to give moar profits for 10 years. Balls to the wall, Full speed ahead, and now all of a sudden derisk? Good F'ing luck with that dumbass, the damage has been done. Bankers will just have to learn to fly methinks.

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