This week saw the largest plunge in US macro data in 11 weeks pushing us back towards the lowest levels since August. Fundamentals (macro and also micro- earnings) did have some impact - with stocks having their worst week in 5 months (but the S&P managed to bounce off its 50DMA) and despite carnage in its largest components, the Dow gained 10 points (of which -150 points were from IBM, GE, and MCD). Today saw a small recovery bounce amid low volumes driven by JPY weakness (testing back up toward 100 post G-20 silliness) and VIX compression as macro overlays were lifted and positions reduced. Gold gained on the day but silver lagged ending the week -5.5% and -11% respectively, with the USD gaining 0.77% on the week (as JPY weakened almost 400 pips off its Monday night highs). Treasuries traded in a 4-6bps range all week (and flow was quiet) but the long-end ended lower in yield by 2-4bps.
The S&P's worst week in 5 months, and nearly its worst since June...
[5]
but it seems like today was about bringing the NASDAQ and Trannies back in line off the S&P all-time highs last week...
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Gold caps it worst 2-week run since 2008 but manages to close above the magical $1400 level...
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US macro rolled over - with its worst week in 11 weeks...
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JPY had quite a week - a 4 handle roundtrip...
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Market breadth was very weak today and just like yesterday, was unsupported in general by other risk-assets...seemingly US equities enjoyed the company of the Europeans once again...
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HYG tumbled very abruptly into the close also.
and market breadth was very weak... and the indices rolled over after the cash close..
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Charts: Bloomberg and Capital Context
Congratulations to Capital Context's Dave Klein for winning the NAAIM's Wagner Prize for active portfolio management [12].