Small Cap Stocks Suffer Worst Week In 18 Months As Retailer Rout Returns, Credit Crashes

Tyler Durden's picture

Blame The Russians, The Chinese, The North Koreans, and The Welsh... but not The Fed...



Overnight saw more China turmoil.. (MSCI China ETF saw its biggest drop since Brexit)


With China 'VIX' spiking to 2017 highs...


Then Europe followed through with Corporate credit markets crashing by the most in 18 months...

The cost of insuring against non-payment jumped the most this week since February 2016, when the oil price slump heightened default risks of energy companies and their bankers.

And while stocks bounced today in US, the week was not pretty.


  • Dow's worst week in 5 months (Mar '17)
  • S&P's worst week since pre-election (Nov '16)
  • Russell 2000 worst week since Feb '16
  • Financials worst week in 5 months
  • VIX biggest percentage spike since Aug '15 (China Deval)
  • HY Credit Risk biggest jump since election (Nov '16)
  • Silver's biggest week since Jul '16
  • Gold's biggest week since Apr '16
  • Ofshore Yuan's best week in 7 months (Jan '17)

Russell 2000 was the week's biggest loser (worst week for Small Caps since Feb 2016); Nasdaq is down 3 weeks in a row (worst week in last 7)


As Small Caps outperformance since the election has been erased...


Nasdaq was unable to break back above its 50DMA...


But it is the S&P 500 that is most worying to technical anlysts as this is the longest its held under the 50DMA since April...


Today's modest bounce was very weak as Buy-The-Fucking-All-Out-Nuclear-War-Dip'ers did not show up en masse...


Retailers were ugly bnut Energy and Financials suffered this week...


FANG Stocks suffered their 3rd losing week in a row, dropping to one month lows...


Retailer Rout returned this week...


For the worst week since Dec 2016...


VIX reached as high as 17.28 today - its highest since the election...


The VIX term structure inverted for the firs time since May...


Market Breadth (by any measure) remains dismal...


Credit markets were really ugly this week - as we noted above, Europe was a bloodbath - but US HY Corporate bond risk spiked 30bps - its biggest jump since the election...


Treasury yields tumbled on the week - pushing towards YTD low yields and entirely erasing any payrolls losses...


And at the very short-end, T-Bills are signaling early October debt ceiling deadline...


But while VIX shot up at the short-end this week, it remains relative ignorant of any debt ceiling concerns...


The Dollar Index closed lower for the 4th week of the last 5, erasing last Friday's post-payrolls ramp...


JPY has strengthened for 5 straight weeks against the USD, Yuan also surged this week (best wek in 7 months) with commodity currencies weakest...


And as the dollar sank, Bitcoin had its best week since pre-Brexit anxiety sent the virtual currency surging in June 2016... to a new record hiugh at $3550


WTI found resistance at $50 and support at $48 this week but ended lower...


Gold surged on the week as safe-haven buying sent the precious metal to $1298...


The last few weeks have seen gold and Bitcoin moving together...


Finally, we note that last week it was FX risk that spiked, this week it was equity's turn. What snaps next week?


Bonus Chart: "Probably nothing"


Bonus Bonus Chart: Maybe Gundlach's favorite indicator is wrong this time...

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jamesmmu's picture
The Market Will Fall By 50%-70% As The Petro-Dollar Comes To End: Steve St. Angelo

BlueHorseShoeLovesDT's picture

Will my Vix calls still payout if there is a nuclear war?

Kprime's picture

your investments will mushroom

BlueHorseShoeLovesDT's picture

Ok as long as they don't pay me in Bitcoin.

runningman18's picture

So...where was this 200 point bounce that all the BTFDers were proudly predicting was going to happen today?  Hmmm...maybe BTFD is not always going to work out guys...

eclectic syncretist's picture

They must have forgot about the Federal Reserve and Congress' small business eradication program.

CRM114's picture

The Welsh, eh?

Bloody Viet Taff needed taking out a long time ago.

ReturnOfDaMac's picture

Bet a cookie that gold gets monkey hammered back down to 1250 by end of next week.

silverserfer's picture

the war between goldbugs and bitcoin fags is real!

BlueHorseShoeLovesDT's picture

One little EMP in the right place, then where is your Bitcoin?

FreeShitter's picture

One little EMP anywhere near you, is a bigger problem than bitcoin

MillionDollarButter's picture

Yeah, like "where's your food?"  

eclectic syncretist's picture

Bring on the EMPs bitchez. I can make whiskey finer than 12 yr single barrel Jack in less than 2 months. Talk about your tradable commodities!

Squid Viscous's picture

Drumpf and Kim Jong are both fucking pussies,


runningman18's picture

BTFD didn't work out so good yesterday or today even though so many people were talking a 200 point bounce.  Looks like the easy money is not going to be so easy anymore.  Looks like people are going to have to start using those critical thinking skills again. 

eclectic syncretist's picture

Pull yourself up a linear chart of gold going back to the late 2011 highs and draw yourself a down trendline if you want to see something interesting.

Stormtrooper's picture

Looks like the PPT will be spending a long weekend on the printing presses this weekend preparing for next weeks market.

World citizen's picture

Fascinating! Never happened before! Unique happening...

Now please. tell me something I don't already know - thank you!

vegas's picture

This trading day a complete waste in the Unicorn meat futures market [a/k/a SP500 & Dow30] ... probably nothing to worry about. WTF.

user_name's picture

The S&P is at least somewhat reasonable.  The DOW is a crackhead after he just found a $100 bill on the street.  NASDAQ too

awarebulldog's picture

That S&P 500 Bonus Chart is very concerning.  If the economy was really good as the FED and gov't reports show I would say it the chart is wrong this time.  Its not though and it's withing the realm of things that it could happen.  It will be intersting to watch.

taketheredpill's picture





Favourite Blackadder is S2E01 (Bells) but they're all pretty good.

Xena fobe's picture

Difficult to understand the accents. 

Dragon HAwk's picture

And we all knew it would be green... Note to New Hires and Millennials, never ever send an accountant a note using red ink.  no matter how important you think it is, they don't want to see it, in Red.

adr's picture

One of my teachers did an experiment one time and put all the A grades on a test in red ink and all the Ds and Fs in blue. 

Without reading the grade the smart kids had a fit as they saw a red mark heading towards them. The idiots were wide eyed and ecstatic seeing a blue mark, only to have their hopes dashed when there was a big blue F. 

I guess the lesson was not to react and make a decision before you have all the information about a situation. 

Wilcox1's picture

I've never seen a good friday dip, but had hope today would be the day. Gotta get a pretty decent chunk back in!! Tuesday then?