Volumes were not that far below average today as the Dow and the S&P (but not the miraculous NASDAAPL - not that story again please!) ended the day lower after some significant intraday volatility early (around the ECB/BoE decisions and jobs/ISM data in the US). S&P 500 e-mini futures levitated off the day's early lows to stabilize around VWAP before testing up to unchanged and then losing it all into the close on heavy volume and larger average trade size. Financials were the biggest losers, as the big banks dumped off most of their EU-Summit gains (with JPM and MS down over 4% today), followed closely by Energy names - even with WTI basically treading water close to close (despite some +/-2% swings early on). USD strength saw Silver lagging on the day and gold dropped a little but rather notably since the EU-Summit, gold and the S&P have been trading more in lockstep (with Treasuries and the USD pointing to more risk-off perspectives). Elsewhere in commodity-land, corn continues its upsurge - now up 40% in the last 3 weeks. After falling off the 1.25 cliff as Draghi disappointed, EURUSD tracked sideways just under 1.2400 for the rest of the day; carry FX pairs tended to drift lower most of the day but the afternoon was quiet. Treasuries limped a little higher in yield into the close - led by the long-end - but ended the day down a few bps from Tuesday's close (with 7/10Y outperforming). Treasuries are unch from the last NFP report (as is EURUSD) while ES is 55pts higher - hhmm. VIX ended the day up almost 1 vol accelerating above 17.5% as futures dived after-hours and cross-asset class correlation remained relatively low today - though ES traded with CONTEXT - as Europe's tensions were once again shrugged off once it had closed and then remembered into the US close.
Gold and Stocks seem joined at the hip here post EU-Summit as Treasuries and the USD (strength) say something different...
[7]
from the last NFP report, Treasuries and EURUSD are unchanged but the S&P a perfectly sensible 55pts higher...
[8]
Broad risk assets drifted lower overnight to ES and recoupled early ion the morning as Europe opened. Some disconnects intraday were evident with equities generally underperforming from ISM to Europe's close. Risk recoupled for the rest of the day with a brief rally over-reaction and sell-off over-reaction into the close...
[9]
The high-beta equity exuberance - or is it "when in doubt, buy AAPL" from the long-only crowd looking at rumors of a new minipad - has pushed the NASDAQ up over 5% from Pre-EU Summit and it notably outperformed this afternoon...
[10]
and Financials were the laggards in a big way today - all trading notably lower than the Friday post-EU-Summit decision open and reverting a lot of the last Thursday pre-EU-Summit rumor move also...
[11]
but on the bright-side for now, it appears JPMorgan's equity and CDS have realigned for now - notably lower in stock price than when we pointed out that CDS was still seeing more pain (although into the close JPM CDS was popping back wider again suggesting a little more weakness still relatively speaking to come for its stock)...
[12]
Charts: Bloomberg
Bonus Chart: Corn's magnificent weather-fueled ripfest (and comment via Reuters [13])
U.S. corn surged 5 percent on T hursday to its highest price in over a year and soybeans jumped to within sight of their record high as new forecasts offered no sign of rain relief for withering crops. With fields now at the mercy of what may be the worst Midwest drought in nearly a quarter century, grain traders ignored the potentially bearish influence of a rising U.S. dollar and focused on growing signs that one of the biggest corn crops ever planted by U.S. farmers is now shrinking by the day.
[14]
Corn prices have surged by nearly 30 percent over the past two weeks, dragging wheat and soybean prices up with them and threatening to kick off another bout of food-inflation fears. Only a few times before have prices risen so far, so fast - once was in 1988, the last time the U.S. heartland faced such a dire drought."The general theme is going to be that the hottest weather is in the very near term but the rains still will be slow to pick up here over the next couple of weeks," said Joel Widenor, a meteorologist with Commodity Weather Group.
