Following Friday's two-year high volume levels on the NYSE - as OPEX and rebalancing dominated - today saw reversion to the dismal mean in both cash and futures market volumes. It seems sell-the-news was the meme today as builders (LEN earnings exuberance) and AAPL (less than whisper sales) sold off and broadly speaking we saw the month/quarter's winners lagging as safety and stability lead the way.
Utilities bounced, Health care kept going, and as the NASDAAPL reverted, so the underperforming Dow Transports rose. Equity indices closed in the red - once again for a Monday - despite an effort to test back above 1450 in the S&P to see if any willing buyers remained.
Cross asset-class correlations were high - quite systemically high - but while Treasury yields closed near their lows (down 2-5bps on the day), S&P futures ended in the middle of their range (back at VWAP). USD strength hurt commodities but Gold managed to outperform its peers (though closed -0.45% compared to USD's +0.22% move).
High yield credit underperformed and chatter of postponed and downsized deals suggests a regime shift in exuberance.
VIX ended slightly higher, back over 14% though risk premia remained on the high side.
Somewhat remarkably - the last six days have seen the S&P drop a stupendous 0.6% - this is the biggest soix-day drop in over 5 weeks and 2nd largest in over 2 months!!!! -0.6% in 6 days!! bwuahahah...
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Risk assets generally opened weaker but traded up during the day session...
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but it seems like some of the month/quarter's exuberance is being unwound as NASDAAPL underperforms and Trannies outperform...
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and in sectors (post-FOMC), Healthcare remains the big winner (a la QE1-Extension discussed earlier) and Utilities finally played catch-up today...
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EUR weakness and JPY strength did not help carry traders provide juice to stocks (nor did TSY 2s10s30s) but the USD ended +0.2% from Friday - though well off its highs during the European session...
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and while commodities were all lower on the day (USD strength), Oil spurted after the pit close and Gold limped higher during the day (with OPEX tomorrow)...
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Charts: Bloomberg
Bonus Chart: CAT leaked its presentation ahead of tomorrow's investor day - noting higher recession chances while trying to sound as upbeat about China as possible - stock is dropping after-hours... as 2015 EPS from $15-20 to $12-18
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and the slide...
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