Better volume than yesterday, but still below average, saw the S&P suffer its devastatingly worst day (and first down day) in the last 10 days. The sell-off appeared to start on some Esther 'hawkess' George comments and were stick-saved by rumors of a Hilsenrath article (which appeared and was full of nothing). The S&P futures 'miraculously' reverted perfectly to VWAP but still ended its 10-day-winning-streak. Bonds were very modestly bid but liquidity was thin and activity muted. Gold and Silver had a positive day (up 0.55% on the week) as the USD kept falling (down a matching 0.55% on the week). WTI limped a little lower holding at $105.75 as gas prices continue to surge. Builders remain worst on the week (despite the 'awesome' NAHB print today) and Utilities best. Since 6/19's FOMC meeting, QE-sensitive sectors Energy, Materials, and Homebuilders remain the biggest losers with the winners (Financials and Discretionary) giving some back today. VIX was relatively well bid today as hedgers dug in ahead of Ben's speech.
Do not panic - "it was still a victory for the bulls" was the anthem cried out from Maria B before the close...
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The S&P 500 futures managed a remarkable miracle ramp to perfectly end at VWAP... all the volume on the downswing and the algo-ramp to VWAP with no volume...
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But evidently hedgers were active this afternoon as VIX pushed notably higher...
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Gold and silver managed modest gains...
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amid the USD weakness... (AUD surging 2% this week)...
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As Bonds went nowhere fast...
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So the question is - was the USD weakness a sign of exit from USD assets (signaled by equity weakness amid modest moves in the bonds) or is the FX market (and bonds to some extent) front-running another dovish evulsion from Bernanke tomorrow that stocks already took care of...
Sine the 6/19 FOMC, the QE-sensitive sectors remain underwater still...
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So Financial stocks are dramatically outperforming... but notably, the credit markets are not at all synced with that momentum-chasing exuberance...
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Charts: Bloomberg and Capital Context