Well that's that - Bad is definitely good. While an initial dip was seen in US equities (as the rest of the asset-classes shifted in Taper-off mode after the dismal jobs/factory orders data), it didn't take long (and took no volume) to wriggle us back up to green and a new all-time high for stocks. But while stocks ended unch for all intent and purpose, the moves were violent elsewhere. 10Y yields collapsed the most in over 5 months today (continuing its ECG-like performance recently); the USD dropped over 0.5% on the day; and while gold ended the day unch, silver (and gold) gapped higher on the NFP release (ending the week lower though). High-yield credit markets are not amused - following long-dated bonds' 7bps yield increase on the week (confirming unwind fears as opposed to growth-driven hopes). Homebuilders gained over 4% on the week (just because). On the week, 'most-shorted' stocks tripled the market's performance. VIX closed at 12.00% - lowest in almost 4 months. BTFATH
From the 6/19 FOMC...
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While today's action unwound some of the post-FOMC moves, here is how we ended up from pre-FOMC: S&P 500 +19, 10Y Yield -5bps, USD +0.2%, WTI Crude +2%, Gold -$2
Shorts squeezed all week...
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Credit markets were not shining the same growth-is-coming message...
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But across asset classes, the week was chaos...
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Oh apart from stocks that is...
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As homebuilders led us home...
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VIX was battered lower - sure why hedge?
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and perhaps worth noting is the dramatic steepening in the VIX curve since the 6/19 FOMC as short-term concerns have now been swept away... perhaps the stability at the November on dates suggests when the market expects Taper (which fits with the earlier 'odds')...
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Charts: Bloomberg
Bonus Chart: yeah s'all good...
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