Goldman Market Summary: "Long-Only Buying Vs. Hedge Fund Selling"
Curious how the world's most important trading desk saw the action today? Here it is.
Following yesterday’s post-close losses, stocks managed to open quite well. Perhaps the result of a better UMich print. Perhaps the start of a typical Friday squeeze. Or maybe just dip-buying ahead of SPX 1350 / 40 (100d + Fibo support). Unfortunately, the bounce fails to maintain positive momentum. Financials unsurprisingly hardest hit today, with BKX off more than 1%. Telecomm manages a good showing though, but more than 1%. Our flows mixed, and again with the same split as yesterday – long-only buying vs. hedge fund selling. SPX ends down 5 at 1353 (-.34%). The DOW ends down 34 at 12821 (-.27%). The NASDAQ ends flat at 2934.
EURUSD ends the day near the lows, which also means the pair ends the week below the bottom of the old range. Technically, this puts a move back to the January low (1.2624) in the cards. EURUSD lower helping the DXY close higher, again. The DXY now up 10 days running. AUDUSD too finishes at the low, now just a stone’s throw from trading back below parity. CAD outperforms following another solid jobs report. USDJPY trapped in a boring 25 pip range. USDMXN holding above 13.50. USDCLP still in its 480 / 490 range, which is rather surprising following China’s disappointing data and broad LatAm weakness.
Treasuries close higher on the day with 10y yields finishing 4bp stronger. The market rallied for most of the NY session following a sharp selloff on better data. Flows were light on the day; overnight we saw better buying of 10s and selling of 30s from fast money. While Europe primarily drove this week’s price action, a slew of US data next week should provide a change of pace for US fixed income.
Commodities lower ending a bad week on a sour note – WTI down 1.3%, Brent down 0.5%. Metals continue to be one way gold down 0.9%, silver down 0.5% as Gold is now down 13% from the years highs. In ags: cotton down 3.5%, sugar down 1.1%, corn down 1.1% and wheat down 0.7% as the WASDE reports continues to weigh on the market.
Yesterday, post-close headlines in US Financials lead IG credit to be bid by accounts. After briefly trading tighter at the equities open, IG continued to trade wider on systemic risk concerns, with IG closing at 108.5. HY outperformed today, only to reverse in the afternoon hours, closing at the day’s lows of 94.812.