Bonds & Bullion Tumble As Stocks Stumble On Macro Weakness

Tyler Durden's picture

Treasury yields pushed 4-5bps higher on the day - the worst in 3 weeks - as yesterday's test of 2014 lows saw some reactive bond-selling. Asian and EU PMIs sent stocks to record-er highs but absymal US PMI and housing data took the shine off the exuberance early on (despite the best efforts at a 5th short-squeeze ramp at the open in a row). AUDJPY was in charge of stocks once again helping the S&P desperatly cling to unchanged. Espirito Santo bankruptcy headlines stumbled stocks at around 1300ET (but that dip was bought). The USD rose modestly (now up almost 0.5% on the week) led by GBP and EUR weakness but that was nothing compared to the dumpfest in precious metals. Silver's worst day in 6 months and a big drop in gold retraced them to near June FOMC levels. Credit markets continue to diverge bearishly from stocks (now 30bps wider than the tights as stocks rally to new highs). Despite the ubiquitous late-day ramp, stocks ended the day mixed around unchanged (and VIX higher on the day). By the close the S&P 500 closed +0.045% to a new all-time-record high.

 

Sine MH17 Headlines, the Dow remains red and today saw some gains erased...

 

But today was all about the opening ramp/short squeeze once again...Notice the plunge at 1300ET when BES Bankrutcy headlines hit...

 

As AUDJPY ruled the day...

 

And helped to create the 5th short squeeze in a row...

 

Treasuries sold off today leaving yields up 1.5 to 3bps on the week...

 

Since MH17 headlines hit, HY is 10-15bps wider and US equity markets are up 1-2%...

 

High yield credit spreads are 30bps off their early July tights but stocks are higher still... Something is breaking

 

Commodity markets were very active. Copper soared, Oil rolled over again in its range and gold and silver collapsed...

 

Quite a day in the gold futures markets...

 

 

Do not blame todasy's albeit tiny gains on Jobless claims being great - US PMI employment plunge to 10 month lows...

 

Charts: Bloomberg