No news is the best news. Quite a week across every asset class dominated by the last two days as USDJPY broke 100 and seemingly all hell broke loose (apart from in stocks). Spikes in Treasury yields (10Y and 30Y +15bps on the week); a surging USD (+1.3%) driven by major JPY and AUD weakness (-2.75%) and the biggest drop in EUR in 6 weeks; Gold and Silver sold off hard (-3.5%) before bouncing back this afternoon ending -1.5% on the week; crude oil plunged but the Brent Vigilantes were not so easily beaten and ripped back above $96 and higher to close the week. Bond-like stocks (Utes) were hammered as high-beta cyclicals (homebuilders) ripped and while stock indices rolled over a little they remain near highs. It's not all sunshine and ponies though... credit markets drastically underperformed (playing catch down from an exuberant few days but sending a clear message to stocks) and the VIX curve steepened rather significantly around the Labor Day horizon - a date that represents desk chatter for "tapering" and debt ceiling drama to re-appear). S&P futures exhibited a spooky 15-min cycle zig-zag pattern this afternoon - in a totally human way... and average trade size was very low (algos) - right before the late-day ramp.
and right on time...S&P futures jumped 5 points on absolutely nothing into the close
Time for K-Hen to rip this market
— zerohedge (@zerohedge) May 10, 2013 [9]
Equity index gains from NFP remain strong and beta is starting to show separation...
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As bond-like stocks have suffered while high-beta momo bets are all-in...
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S&P Futures were dominated by algos all afternoon (h/t @SellPuts) which provided just enough ammunition to spark the momentum jerk higher to run for highs of the day soon after 330... (just as a side note this ramp happened right as AAPL was starting to accelerate to the downside)
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Treasuries legged higher in yield notably after the break of JPY100 and again at today's open after being relatively flat for the week post NFP...
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FX markets were nuts this week. AUD slumping and JPY crashing almost 3% against the USD are extraordinary moves...
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Despite the USD surge, Commodities actually fared relatively well. Gold and Silver recovered losses on the day to close pretty much mirroring the USD gains on the week. Oil prices plunged but the vigilantes were not putting up with that... and copper pushed higher...
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Credit's over-exuberant spike in recent weeks has been unwound...
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and on the week, credit has been a significant underperformer...
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VIX saw major steepening in the last few days around the Labor Day period - an horizon that many suspect will see debt ceiling debates and 'tapering' come back to the front page...
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Charts: Bloomberg and Capital Context [19]
Bonus Chart: There is a reason why Copper is mythologized as an economist... because it tracks reality.. we have seen the macro and copper moves like this before (especially relative to world stocks)...
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