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Stocks Slump Most In 2 Months, Bonds & Bullion Safe-Haven Bid
US equities suffered their biggest drop in 2 months today, with the S&P 500 closing a glaring 30-point divergence with high-yield credit markets which also sold off dramatically. The S&P 500 broke (and closed) below its 50DMA (as did the Nasdaq, Dow Industrials, and Transports). Russell 2000 dropped to beyond 4-month lows (-4.4% in 2014). Early USD strength gave way as stocks started to leak lower and closed unchanged (+0.5% on the week) led by JPY and EUR strength. Treasury yields plunged 4-6bps on the day (led by the long-end) with 10Y testing the critical 2.50% handle once again. VIX broke above 16, its 4th biggest rise of the year. Gold rose as stocks lost ground but silver, oil and copper slipped lower. HY Credit spreads closed at 8 month wides. Investors also piled into safe-haven short-squeeze 'camera-on-a-stick'. Stocks closed not "off the lows."
This move had NOTHING to do with Fed's Fisher's comments at all... he has been saying the same thing (rightly) forever... if it was Evans then maybe.
Who could have seen this coming?
apart from the Russell 2000
Some credit color
@Convertbond market never cleared. Dealers been calling around with "cleanup lists" last couple of days. Syndicate been bringing juicy names
— credit markets (@swaptions) September 25, 2014
From The July Russell 2000 highs, it is down 9% now.. and all but Trannies are now in the red also...
Leaving stocks ugly on the day (Dow's 4th triple-digit move in a row)
It appeared there were 3 triggers for todays' move but frankly the equity move was as much catch down after yesterday's 50% retrace dead-cat-bounce than anything else...
And since FOMC, everything is now red...
VIX surged back above 16...
Treasury yields plunged (led by the long-end)
FX markets saw early USD strength give way rapidly as JPY carry unwinds and EUR strength pushed the USD to unch on the day (still up on the week)...
Gold rose as stocks lost ground but silver, oil and copper slipped lower...
Across asset-classes...
Charts: Bloomberg
Bonus Chart: Camera-on-a-Stock safe haven bid
Bonus Bonus Chart: It appears the hot money trades are slowly being unwound... commodities, EM FX, HY credit, and now US equities...
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Not off the lows! Whoopeeeee!!
What are people's opinion about going long Silver, and/or SLW/GDX?
No problem going long the phys. Play with the paper at your own risk. Until I see serious evidence of a bottom, staying away from the paper for now.
Yawn. Wake me up when "stocks slump most in 7 years".
Exactly! This is nothing but another patronizing manipulation.
If you don't hold it, you don't own it. GLD and SLV were created because physical supply was running short, and there needed to be a way to divert people away from the real thing. Not only does owning paper hurt your own investment by not creating demand in the physical market, but the paper is leveraged so much that they can't possibly provide the metal for everyone who thinks they own it.
As for miners like SLW, they aren't going to turn much profit while the price of silver is less than cost of production. TGLDX has had a great year, but it's the only paper fund with physical backing.
If you want to go long physical, good move. Just be prepared to wait until the dollar collapses to get fair value.
GDX ?
It would have to fall another 9% to reach its 52 week low. None of its top ten holdings except for Yamana are at 52 week lows; they'd have to fall 4%-32% to get there. Long term looks to me like the GDX holds too many miners that are debt saturated without enough levered free cash flow to make it out the other side of an extended slump with equity investors intact. Shorter term, who the fuck knows. I'm missing 5% of my 'fingers' catching the falling AUY looking for a nonexistent bounce.
About that all time record buy in by the 'smart money' on Fridays full retard close.....um, NEVERMIND!
Is there a hurricane about to hit the UK ?
Feels so 1987, we just need that to complete the deja'vu, all over again.
Silver once again getting clobbered after the close
Silver is acting like copper in the 1930's prior to re-armament.
It could go way below mine cost and stay there for years if it carries on tracking it.
I did have some, before my unfortunate accident, but its looking more like a commodity
every day, not a monetary metal.
Let the downvotes commence.
haha ... with THIS crowd?
i wear down votes proudly
need epidemic of werewolves
Excellent, bring daddy more shiney!
ho hum, another dip. green tomorrow
dead by dawn [/evil dead 2]
Hopefully we can all see from a relative strength standpoint YTD and beyond just a couple days Russy been taking it on the chin the worst, but that cocksucker Johnny5 doesn't seem yet ready to let Russy collapse under its own weight as the true piece of digshit it is. Hmmmm. Held up today after the initial flush yet its chart appears the most susceptible to a breakdown with volume. All hands on deck to save Russy?
Mass Fraud should be a crime against humanity.
Please support this petition at whitehouse.gov.
https://petitions.whitehouse.gov/petition/mass-financial-fraud-should-be...
Sign-it, Share it, repost it, pass it on.
WTF is "camera on a stick"?
a while ago 60 minutes did an infomercial for these guys.
what an embarassment ... to think back in the day i watched that show religiously
GoPro, rugged video cameras for people who are EXTREME.
> WTF is "camera on a stick"?
has something to do with a colonoscopy IIRC...
I expect to hear some flim-flam from Kuroda or Draghi or one of the FED mouthpieces about "investigating new purchases" or "extended period" sugar to keep the cotton candy markets fluffed.
They cannot allow the loss of trust of another crash, unless they are ready to move to "Phase C" of destroying the mddle class.
Green by tomorrow, they won't let stocks close red for the weekend.
Uh oh, rotation into bonds. That ain't good!
5 1/2 years+ bull Built on nothing
The dotcom crowd had a better reason to believe than today's bulls do. Yet even knowing how these always end, people still go down with the ship.
BTFD
A 1.5% Dow hit in one day? I honestly never thought I would ever see that again. Janet Yellen also never thought she would see that again. I'm guessing they are in an emergency meeting right now planning the next QE.
Yellen became Fed chair on Feb 3, 2014.
Here are the worst days for the DOW since then:
2/3/14: -324
7/31/14: -306
4/10/14: -267
3/13/14: -232
Plus today's (9/25) drop of -264.
There were also 18 additional days when the Dow lost at least 100.
I distinctly remember a number of market forecasters and ZH posters thinking that the 7/31 drop was a harbinger of the crash that we all know is coming, but the DOW recovered all of those losses by 8/19.
When the ZH headline reads "Stocks slump most in 20 years, bullets and beans safe-haven bid," then I'll know it's on like Donkey Kong.
Perhaps a bit early for this, but what the heck …
{Rod Stewart slinks up to the microphone and begins to sing:}
Wake up, Janet, I think I’ve got something to say to you
It’s late September and it looks like I’ve been quite a fool
Investors keep you amused, but we feel we’re being used
Oh, Janet, you couldn't have lied any more
You led me away from bonds
with the most inglorious of cons
You stole my savings, and that's what really hurts
{guitar solo}
All I needed was the Fed to lend a guiding hand
But you turned into a dove
and mother, what a dove – you wore me out
All you did was wreck my Keogh
with rates so close to zero
Oh, Janet, you couldn’t have lied any more
You led me right into stocks
just as they were hitting the rocks
You stole my future, I couldn't retire now if I tried
{guitar solo}
I suppose I could push Herbalife or head on back to school
Or sell advertising space on the back of a rented mule
Or find myself a lemonade stand
that needs a helping hand
Oh, Janet, I wish I'd never seen your face
My very first trade, you see
marked the peak of the S&P
You tried your best, but I hate you anyway
{cue guitar solo, then scintillating mandolin break}
Janet, I wish I'd never seen your face
I'll get back to parity one of these days . . . (boo-hoo)
So how many clicks does this GoPro thingy get?
Sorry, different bubble.
green shoots will sprout any second now.
i am already nibbling at some real small cap bargains, fast growing companies that have been hammered.
I'm going boating this weekend.