Another Friday, another green close (now ten in a row) as Treasuries suffer their biggest weekly yield rise in a year. Another new-er-er all-time nominal high for the Dow but Nasdaq was the winner on the week (+2.7%) against a cluster of the rest at +2.4%. Volume was sub-par at best, trade-size low, and market breadth diverged bearishly but that didn't matter. Financials, Consumer Discretionary (and builders) were the sectoral winners up around 4%. Away from stocks, things are moving quite seriously: the USD is up for 5 weeks in a row - its biggest 5-week run in 9 months (and highest in 9 months); WTI crude outperformed in commodities (despite the USD strength) back up to 6-week highs; JPY had its worst (which is good apparently) week in 23 months losing 2.5% against the USD back to almost 4-year lows; Silver and Gold had their best (and only positive) week in 5 weeks. Credit markets (like TSYs) played catch up and snapped tighter on the week (even though HYG tended to underperform). VIX did drift lower (-0.5 vols to 12.5%) but remains well north of where stocks would expect. The much-vaunted late-day ramp came as usual and lifted all the indices to their opening (post-NFP spike) highs. As a gentle reminder, the Dow is up 613 points in 9 days - that is all.
Bonds suffer biggest weekly yield jump in a year...
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as Equities surge to new highs...back in the trend channel...
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- accompanied by low and bearishly diverging volumes...
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and TRIN...
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VIX is moving ion the right direction but protection remains relatively bid...
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as the VIX term structure shifts to its steepest this year...
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Trannies recover but Nasdaq leads on the week...
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Stocks got a little over-excited into the close and retraced back to where credit/rates/vol were trading...
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And the relationship between cash bonds (dark red), the HY bond ETF (light red) and stocks (green) is 'interesting'...
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Bonds and stocks recoupled but the USD didn't...
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JPY weakness rules the carry risk-on game for now...
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Just a whacky notion here but the weakness of breadth in equities suggest institutional selling - and VIX was well bid before this big jump - which makes us wonder if the big boys are actually unwinding their protection (hence small drip lower in VIX) and selling down their single-stock exposure into this surge.
Charts: Bloomberg and Capital Context
Bonus Chart: Financials have retraced 38.2% of their overall high to low loss... but seasonals are not in their favor...
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