20 Out Of 20 "Tuesdays" For The Dow; Worst Day In Bonds For 19 Months

The streak is alive. For the 20th Tuesday in a row, The Dow Jones Industrials have closed green. With an average gain of 80 points, since 1/25, the Dow is up an impressive 11% but absent Tuesdays is merely unchanged at +0.2%. Today saw significantly volatility in stocks though with Nikkei and S&P futures giving up all their gains at one point only to bounce back into the close for a glorious victory. Volatility was everywhere as the collapse of the JGB market spills over. VIX rose 0.5 vols to 14.5% (disagreeing with stocks). FX markets jerked and gapped with JPY ending down around 1% from Friday's close. Commodities diverged today with Copper and Oil rising and Gold and Silver sliding even with the 0.75% gain on the USD this week. High yield credit slid lower all day but we suspect this was dominated by rate risk as Treasury volatility exploded. 10Y yields rose by their most (+16.5bps or 5-sigma) since Oct 2011 to close at their highest since April 2012.

 

20 out of 20...

 

Leaves the Dow unchanged in 4 months absent Tuesdays...

 

Nikkei (and S&P) futures ramped out of the gate, sold off after POMO and the European close to slump back to unchanged before taking off into the day-session close...

S&P futures collapsed back to the lows of the day after the cash close...

 

 

As Treasury Yields exploded higher...

 

Credit markets (this is just spread in the red so the only bleed from rate vol is cyclical) were not buying at all...

 

FX markets were extremely volatile with USD bid as CHF was sold hard...

 

Just how much longer are corporations going to be able to borrow at cheap rates if this pace of yield decompression continues? And will those buybacks continue if the free money dries up?

 

Charts: Bloomberg

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