Safe-Havens Beat Stocks In Q3 As Global Policy Uncertainty Hits Record High

A flip-flopping quarter ended with global stocks flat but global bond yields collapsing...

Source: Bloomberg

Global equity and bond market values rose $1.23 trillion in September but ended Q3 little changed as stocks lost 1.25 trillion and bonds gained $1.8 trillion...

Source: Bloomberg

As global policy uncertainty soars to a fresh all-time record high...

Source: Bloomberg

On the quarter, Bullion and Bonds were bid - safe haven flows along with the dollar - as stocks underperformed, scraping out a very small gain...

Distracted? Entertained? What's the difference?

Stocks

Year-to-date, Russia is outperforming China and US with EM equities underperforming...

In Q3, US equities scraped out a gain but China and Europe were lower (but we note Europe outperformed US and China in September)...

Source: Bloomberg

Chinese stocks scratched out a very modest gain in September, but fell for the second straight quarter (though the small-cap, tech-heavy ChiNext managed gains in Q3)...

Source: Bloomberg

European equities managed gains for the second quarter in a row, led by strong gains in Italy (Germany was down in Q3)...

Source: Bloomberg

In the US, thanks to a pumpathon today, The Dow and S&P were up for 3rd straight quarter (while Small Caps lagged most)...

Source: Bloomberg

On the month, US equities ended green (barely) with Nasdaq Composite rebounding today, to avoid a second monthly drop in a row...

Source: Bloomberg

US stocks were all higher on the day (month/quarter-end flows?) - ugly close for small caps though

Source: Bloomberg

Despite the quant carnage in momo exposure in September (worst monthly drop since Aug 2009), both value and momo managed modest gains for Q3...

Source: Bloomberg

Q3 gains were dominated by flows into Defensive stocks; Cyclical stocks lost in Q3 (but outperformed in September)...

Source: Bloomberg

FANG Stocks fell for the 3rd straight month in September, the worst quarterly drop since Q4 2018's collapse...

Source: Bloomberg

 

Bonds

US Treasury yields crashed in Q3 (for the 4th straight quarter), dropping the most since Q4 2014...

Source: Bloomberg

But September saw US Treasury yields rebound notably from August - among the worst months since Dec 2016 (post-Trump Election)...

Source: Bloomberg

Despite steepening dramatically in September (biggest monthly steepening since Nov 2016 - Election), the yield curve collapsed in Q3 (for the 6th consecutive quarter)...and remains notably inverted...

Source: Bloomberg

30Y Yields fell today...

Source: Bloomberg

FX

Q3 was the best quarter for the dollar since Q2 2018...

Source: Bloomberg

The Dollar managed to ramp this week to end higher for the 3rd month in a row (highest monthly close since March 2017)...

Source: Bloomberg

With China closed for Golden Week, the dollar waited until Europe opened to be panic bid...

Source: Bloomberg

 

Source: Bloomberg

Before we leave currency-land, it's worth noting that Q3 was an ugly one for cryptos with Litecoin down a stunning 57%...

Source: Bloomberg

September was mixed though with Ethereum and Ripple positive but Bitcoin (3rd monthly drop in a row) and Litecoin notably lower...

Source: Bloomberg

Commodities

Q3 was a big winner for silver (best quarter since Q1 2017) while WTI fell for the 2nd quarter in a row...

Source: Bloomberg

WTI plunged again today, dropping back below the pre-Saudi spike levels...

Source: Bloomberg

Despite a great quarter, September saw Silver suffer its biggest monthly loss since Nov 2016 (election)

Source: Bloomberg

Gold rose for the 4th straight quarter, ending Q3 at the highest since Q1 2013... But September was gold's weakest month since June 2018 (after 4 straight months higher) after losing $1500 following multiple saves...

Source: Bloomberg

And the recent weakness should not be a surprise... It happens every Golden Week...

Source: Bloomberg

Silver outperformed gold in Q3 by the most since Q2 2016; but after a big drop, gold outperformed silver by the most since Oct 2018 in September...

Source: Bloomberg

Finally, we note that September saw the biggest surge in positive economic surprise data since Jan 2009...

Source: Bloomberg

Don't forget, stocks are rising on fun-durr-mentals...

Source: Bloomberg

And let's not forget what The Fed is doing everyday...

"probably nothing"