Treasury Yields Tumble To 11-Month Lows; Stocks Hold Near Record Highs

Tyler Durden's picture

It was not a Tuesday, and it was not a Fed day - so stocks closed red. Volume was dismal. The Russell 2000 tested its 200DMA once again (and bounced) but was unable to sustain that strength. Once again the biggest news was the continued collapse in Treasury yields as a combination of massive spec positioning short "because rates have to go up" and the ugly reality of macro weakness combined to send rates to 2014 lows (and 11-month lows for 30Y yields). This is the biggest year-to-date drop in 30Y yields since 2000. The Dow's weakness meant it lost its gains for 2014. Despite ongoing USD weakness (driven by GBP and EUR strength), commodities traded lower with silver worst today (red for 2014), copper weak, and gold and oil flat to modestly lower. VIX was pummeled down to almost 13 midday (which makes perfect sense ahead of NFP - why would anyone hedge that?) but leaked higher as bond market reality set in during the afternoon. The ubiquitous very-late-day VIX slam pulled stocks higher in a buying panic but failed to get the S&P, Dow, or Russell green on the day.

 

 

Before we start on the day's action... take a moment to call the world's largest capital market "wrong"...

 

And a close up this week...

 

Stocks and AUDJPY were largely in sync today...

 

And VIX was pressured and then slammed into the close to ramp stocks to unch...

 

Look at the lower pane for a sense of participation in this rally... lower lower lower volume as we creep higher...

 

Stocks were mixed on the day... with Russell 2000 testing its 200dma and bouncing with a late-day buying panic...

 

High-Yield bond yields did not agree with stocks late day ramp...

 

But Treasuries weren't - all lower yields all day long...

 

And here's some context for the 30Y Yield...

 

Commodities all slid lower on the day - with Silver's big dump early being retraced...

 

Just look at this idiocy in Silver futures today...

 

 

Charts: Bloomberg