JPY crosses were in charge of stocks again today - and not in a good way - as a sideways market gave way to weakness late on as Goldman released part two of their market-bashing research. With the dramatic help of AXP and V (78 of the Dow's 41 points!), the Dow was the only index green today and managed to close just green on the week. Since the taper, Homebuilders have tumbled from heroes to almost zeroes (+1.5% from +6.5% at year-end in spite of the big drop in TSY yields in recent weeks) with Healthcare outperforming (+5.5%). Away from stocks, things were also escalating rapidly this afternoon. Treasury yields limped lower all day then dropped notably starting around 1445ET with 30Y -5bps on the week (and 5s30s at 212bps - the flattest term structure in 4 months). The USD rose on the day (up 0.75% on the week) led by EUR weakness (JPY was relatively stable). Despite the USD strength, gold and silver closed green on the week (+0.25% and+0.7% respectively) but WTI crude led the way up 1.5% on the week at $94.10. Despite valiant efforts to VIX-slam the market higher into the close, the S&P closed red and VIX +0.6vols higher on the week at 12.7%
Interestingly, stocks flip-flopped around the European close/POMO between USDJPY and AUDJPY/EURJPY... caught down to it by the close...
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Year-to-date, the Dow is the underperformer but the last hour or so today saw the other major indices pressing aggressively lower...
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On the week, the NASDAQ and Russell closed green, Dowsmall green, and S&P and Trannies lower...
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Since the taper, there has been some notable rotation across sectors with homebuilders the most notable...
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Credit markets dropped the hint early that all was not well in equity land...
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As did VIX...
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US Treasuries rallied almost non-stop since the post-inflation data spike on Wednesday (with a mini spike higher in yields this morning) - 5s30s are now at 4-month flats and 2s10s at 6 week flats...
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With 30Y bond yields at their lowest in over 2 months...
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The USD rose notably on the week (JPY was unch - irnoically the same as stocks...) - led by EUR weakness (and that smack down in AUD on the back of dreadful jobs data)...
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Despite that USD strength, commodities all closed green on the week...
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Charts: Bloomberg
Bonus Chart: The Treasury curve flatteniung is being ignored for now by the banks (where's my NIM?) but dragging builders lower...
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