Early Exuberance Fades As Stocks Slip And Bond Yields Dip

We appeared to go from good is good (but the underlying macro data this morning also provided some bad is good news) to good is bad by the close. The Discretionary sector almost reached back to unchanged from the FOMC statement but that appeared to be the short-term-top as it faded back by the close. Interestingly with bonds rallying notably from overnight high yields, bond-like stocks actually suffered today (great un-rotation?). Credit markets were entirely unimpressed by the early excitement in stocks and as we entered the last hour stocks began to sink and credit rally for the divergence. Gold and Silver diverged this afternoon with the yellow metal holding gains and coupling with WTI for a 1.5% gain on the day (and gold's best 2 days in over 4 years) while Silver slipped this afternoon to end -0.3%. The USD slow-leaked all day (-0.2%) amid AUD strength and modest JPY weakness (that provided some support for risk-assets early on). Volume was awful - around 30% below average. VIX fell on the day but rose notably more than stocks would imply into the close as hedgers grabbed on but stocks were sold as the Egyptian situation escalated.

 

The discretionary sector almost made it back to unchanged from FOMC - and note how Utes were sold heavily (even as bonds have rallied in the last 2 days)...

 

Across the indices, AAPL's 3.6% gain today provided the outperformance juice for NASDAQ but they remain down 1.5-20.% from the FOMC...

 

The S&P 500 stalled at its 50DMA once again as volume fell and the last 5 days has been the best of the year...

 

 

Credit wasn't buying it and into the close we saw pairs trading to bring them closer into line...

 

Treasuries rallied off overnight Asia session spike high yields... with 2.50% seemingly the tractor beam for 10Y for now

 

Gold and silver diverged as Copper was well bid (because China didn't explode last night?) and WTI pushed on above $98 and narrowed the Brent-WTI to $5 for the first time in months...

 

Charts: Bloomberg and Capital Context

Bonus Chart: It appears the complacency among the gold market participants that the precious metal is going to keep falling has never been higher (based on options-implied skewness)...

 

Bonus Bonus Chart: Don't be too excited about the recent drop in retail gas prices...