Stocks Have Biggest Week Of The Year On Lowest Volume

Tyler Durden's picture

The S&P 500 gained over 3.5% this week (with a dip-and-rip today on dismal volume). This is the best week of the year amid the lowest volume of the year (ex-holiday weeks). Gold, Stocks, Treasury yields, and the USD all recoupled from last Friday's decoupling and limped higher, ending at the top of the day's range today. Financials and Tech outperformed - up over 1.1% - with the majors best as financials won on the week +4.8%. Treasuries close to close were dull but intraday saw rather notable vol as 30Y yields dropped over 10bps before round-tripping back to its high yields of the day. All-in-all, broad risk assets did leak higher today but nothing like as exuberantly as stocks which was somewhat surprising into a weekend likely full of equity dilution for Spanish banks (and more burden for Spain) - or none at all. The USD rallied into the European close and sold off after for the fifth day in a row. HYG outran stocks on the day and maintained the bid (ES closed at overnight highs) but IG and HY credit lagged on the day - though are al better on the week. Cross asset-class correlations dropped notably into the close, as implied correlation dropped and VIX was very stable given the rally into the close, holding above 21% - even as S&P 500 e-mini futures ended the day more than 2 sigma above VWAP (as we suspect futures roll effects kept some out into the weekend). Lastly, this push higher today in stocks saw a major drop in average trade size - certainly not offering the kind of follow through to yesterday's (or the week's) gains that one would expect on a new bull leg.

Today saw ES retrace perfectly 38.2% of its last few day's rally only to bounce and push back to close at those highs...

S&P 500 rose over 3.5% on the week, best week in six months, as volume lagged dramatically...

led by financials best week in 3 months...

But Stocks, Bonds, USD, and Gold all resynced from last week's decoupling and limped along together...

As the S&P 500 e-mini futures closed at overnight highs and rather surprisingly around 2 sigma (light blue) above VWAP (red) with a late-day shift in peak volume (the dark blue line) suggesting we had auctioned up to retest those levels as we note some bigger blocks going through at the close...

For the fifth day in a row, the dollar strengthened into the European close and then faded after...

 

Charts: Bloomberg