"Markets In Turmoil" Russell 2000 Plunges Most In Over 2 Years, Dow Down For 2014

Tyler Durden's picture

The deer is back...

 

Stocks finally snapped and caught down to high-yield credit's warnings. The worst day for the Dow in 6 months, smashing through its 50- and 100-day moving-average. The Russell 2000 was worst on the day to end July down over 6% - its worst month since May 2012. The S&P's had almost its worst day in 6 months. Trannies dropped 3.4% on the week - the worst in 11 months. Stocks closed at the day's lows.

 

NOT OFF THE LOWS...

The week

 

All major US equity indices close lower in July... The Russell 2000's worst month since May 2012

 

The Year... Dow Red, Russell -3.6%

 

Was Yellen right after all?

 

Stocks finally caught down to credit's warnings...

 

Dow's worst day in 6 months...

 

 

Builders are worst but Discretionary and Staples are now red YTD...

 

Amid all the carnage in stocks, Treasury yields closed +/-1bps (long-end higher in yield, short-end lower)...

 

The USD was flat...

 

Commodity markets were clubbed as we suspect EU closing margin calls (and then US margin calls) hit them... WTI dropped below $98!!

 

 

Year-to-date, gold and bonds continue to lead, HY lags...

 

While talking heads were anxious to explain how there was no panic... the moves in commodities had the smell of margin calls to them as equities demanded more cover...

 

So to sum up - carnage in stocks... USD flat, bonds flat... Oil monkey-hammered and PMs dumped.

Charts: Bloomberg

Bonus Chart: "Sell In May" worked after all...

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franzpick's picture

Tomorrow will be worse.

moonman's picture

nope all is rosy tomorrow

Say What Again's picture

I'm confused.  I never heard the go-ahead signal from Yellen or Hillsenwrot, so how did I know I was supposed to go heavy on the puts and short shit

DoChenRollingBearing's picture

 

 

I just sold some VO (Vanguard MidCap ETF) and VB (Vanguard SmallCap ETF).  Edging closer to the door of bailing on my stocks...

Fishez.

But, it pains me that I have to sell pieces of great American companies, which traditionally have been great investments over time.

On the other hand, "No one ever went broke by selling at a profit."

fuu's picture

"Year-to-date, gold and bonds continue to lead, HY lags..."

 

Strange how that keeps happening quietly.

wallstreetaposteriori's picture

Too bad it doesn't happen more loudly, my entire portfolio is treasuries and gold since the taper announcement in december.  Just waiting for the 10yr to hit 1% and make all those interest rates can only go up peeps shut the fuck up.

wee-weed up's picture

The Gov't has a plan for a crashing Market...

Start a Woar!

jcaz's picture

OH MY GODDDDDDDD PULEEZE BUY THE DIP TOMORROW IT CAN'T ALL END NOW FOR ME NOW, IT'S A BUYING OPPORTUNITY,  STOCKS ARE CHEAP, OH MY GODDDDDDDDDD DON'T FIGHT THE FED, THEY'LL NEVER LET STOCKS DROP............

aVileRat's picture

If the market drops, deals will be pulled, which means confidence in liquidity to finance said deals will stop; which will lead to a weakness in gross confidence which will cause a general retreat to cash. Which is what we saw today, as the only thing that was up, was the US$, ironically, because the US$ is drawing -3% at least (margin & WACC may vary)

Since this is a chase for yield, anything greater than 3% ROI (yield to worst) is dead paper, which must upset plenty of bond traders struggling to make a living on 10s30 in Chicago. The Japanese bond pit is a shining example of what happens when the hated market upside breaks, leading to a systemic loss of confidence.

In short? Cheer the dip, savor the dip, but the dip may be here for a long time and the new normal may imply a negative P/L sheet for many spread clippers going forward. At that point, we definitly will see NIRP (real) and perma-structural hiring rotations well below 3% (adjusted, seasonal, U def. changed) for the next 4 years. Not that many will survive that NIRP given increasing short rates & weakening market depth (both of which will chew up 80% of the last bears alive).

Anyone got an evil cat I can buy?

 

 

THX 1178's picture

Is this at all related to the most recent taper? What are we down to now? 5 billion a month?

TahoeBilly2012's picture

TYler that deer looks well protected by that doug fir on his right, me thinks the car driver dies and the deer walks off.

Robinhood's picture

That deer looks like Kevin Henry.

espirit's picture

A meaningful correction has to be Putins fault, afterall there hasn't been one till he made the news.

lol.

Squid-puppets a-go-go's picture

nar not Putin

Greenspan. Its pathetic that the herd wont pay attention to mountains of risk until someone like that geriatric chimp pipes up

nmewn's picture

Oh yeah, you know it.

mt paul's picture

no bad pussie 

for you...

LibertyBear's picture

Stock market is rigged, up AND down.

zaphod's picture

If this is what happens when the FED only prints $45B/month ($540B/year) instead of printing $85B/month ($1.02T/year, more than the entire 2007 montetary base BTW), just imagine what will happen when the printing or if (gasp) interest rates go up.

When the petrodollar falls, and the ability to print money and have others buy it is gone, most people will be completely blindsided by the crash. That is when the US elects a strong arm ruler to "fix" everything, and the concept of America finally dies.  

HardlyZero's picture

Believe FED announced this week the QE is now $25B/month.   At this rate should be kaput by October 2014.

I have read allocation $20B to treasuries, and $5B to mortgages/banks/stawks?...get SRTY.

cro_maat's picture

DoChen - The great American companies in my view are the small to medium size companies that are family owned, not listed on a stock exchange and serve not only their own profit interests but their customers & employeees. Oh and they also do not harm the environment or the community that they do business in.

The mega multi-national "American" corporation like Google, Boeing, Microsoft, etc. are not American nor great. They are international and serve shareholders exclusively. As to investments over time (long term buy and hold), I will stick to actual physical resources with no debt attached such as timber, gold, silver, land, tools, production equipment, animals, etc.

Of course I am preaching to the choir as I know that you have a good diversified portfolio in more than 1 country.

Socratic Dog's picture

Preaching to the choir, but well said none the less.

Rentier88's picture

MUAHAHAHA...and the rollercoaster downward has just started...!

SumTing Wong's picture

Remember this is the end of the month. Everyone was going to sell in the last half hour, and we all knew that.

Tomorrow could be really bad, or it could be all shits and giggles. I'm going for low volume lazy rise into the close on a nice Friday afternoon.

(But if the market represented the economy it would be all-out fucking pandemonium tomorrow as we break all triggers in the first half hour.)

Say What Again's picture

I'm going to say this in the most polite way possible.  What screens were you looking at?  The selling started right at the start of the session, took a mid-session pause, and then continued selling all afternoon.

TheSecondLaw's picture

Good sarc - don't hear many shouting that.    And some good, solid pain for the BTFATH crowd today.  I suspect dip buyers might be a bit nervous tomorrow. Let's see.

Keyser's picture

Nice day in the VIX... 

garypaul's picture

I think he meant that the market closed on it's lows.

jarana's picture

Let's be macroprudent tomorrow...

Hindenburg...Oh Man's picture

There was desperate market-manipulated buying in the last 1/2 hour. if we had closed the market at 330, we would have been even further down. 

When the selling volume is high, the manipulation is unable to keep up. Look at the movement during the day, versus the volume. The market was pumped back up every time the volume lagged, but then was beat back down. 

angel_of_joy's picture

Cheapskates ! They want to pump-up the market, but without spending what it takes to do it right ...

Keyser's picture

Probably overloaded their capcity to hedge the downturn, after all, they whacked all the markets today; metals, bonds and equities... Only so much sugar to go around... 

cougar_w's picture

Paging Richard Whitney ...

SheepDog-One's picture

Everyone sold the all-time highs.....to whom? Imaginary greater fools sitting on piles of really dumb money on the sidelines I guess?

Horse shit.

espirit's picture

401(k)'s = All In.

Fishez, Bitchez.

El Vaquero's picture

BTFWTF. 

 

Is this a real (pseudo) market crack appearing, or is this just going to lull the shorts in so that they can take it up the tailpipe?

franzpick's picture

Barry will get to the bottom of this.

El Vaquero's picture

I think you mean "Barry is a bottom." 

 

Tailpipes and all.

franzpick's picture

I used to think "a dick with ears" was a caricature.

tumblemore's picture

given the level of market manipulation for so long when it finally goes under i imagine everyone will be surprised

El Vaquero's picture

I won't.  I know that something is going to happen, I just don't know when.  The other question is, does our stock market get Zimbabwe'd or does it go crash, or does it go crash, then Zimbabwe'd? 

tumblemore's picture

yeah i meant the actual day it happens.

 

 

HardlyZero's picture

Good Thing: Zimbabwe only occurs if there is a completely out of control printing press and hyperinflation.

Bad (and Good) Thing: the USD printing press is closing down.

Summary: there will be crashing markets and little 'crack-up-boom' since no one has any money in the US any more.

 

The banks have all the cash, but they will probably use it to pay their employees and buy up cheap land.

 

 Huge deflation probably everywhere and dead-zombie animal spirits.

J Pancreas's picture

Of course all is rosy tomorrow, its the first. EBT gets recharged my nigga! We eatin' lobsta 2marr0w!

EBT excepted's picture

yup, all coming back...I asked a co-worker whether two or three 500 pt drops would convince him..."nope"...

flacon's picture

It's just a flesh wound.

Keltner Channel Surf's picture

. . . said Van Gogh, as he began to paint "Wheat Field with Crows"