Goldman Summarizes The Rout: "Derisking Is The Name Of The Game"

From Goldman's Sales & Trading Team,

The equity rout continued. Growth tech names felt the heat once again as Nasdaq led the way down, but the weakness was truly wide spread as all sectors ended in the red – both in domestic and overseas developed markets. Earnings season continued, but derisking is the name of the game in these markets. Financial feel the most pain (-1.1%) on a headline earnings miss, while Oil&Gas and Utilities finished at the top of the pack with only minor weakness. Closing levels SPX -1.0% to 1815.69 (-2.9% for the week); DJIA -0.9% to 16026.75 (-2.4% week); Nasdaq -1.3% to 3999.73 (-4.3% week).

The VIX marches higher +1.23 to 17.12.

Negative sentiment in equities gave way to a quieter day in FX. The majority of G10 near flat on the day, with light flows. USDJPY drops to a low of 101.38 but recovers to trade above 101.50 for most of the day with little trading post ‘BOJ GOVERNOR KURODA: JAPAN ONLY HALFWAY THROUGH MEETING BOJ'S PRICE TARGET’. EURUSD also unchanged despite dovish central bank commentary, with no reaction from headlines ‘ECB'S COEURE SAYS THE STRONGER THE EURO THE GREATER THE NEED FOR MONETARY ACCOMMODATION’. Elsewhere in EM, BRL is the outlier down -0.60% as any gains reversed intraday as the currency played catchup to its peers.

10y treasuries traded in a 2bp range during NY hours on a fairly quiet day. Flows in cash were a combination of real money selling in the long end and fast money selling in the belly, while in swaps we saw some risk-off hedges in the form of back end receiving.

Gold chopped around within a $10 range in the London session and then within a $4 range once NY got it.  The only interesting element to the precious complex today was a steep 1.53% rally in palladium which occurred after headlines flashed stating “NATO SEES PUTIN SEEKING FULL UKRAINE OCCUPATION, BILD SAYS”, Brent rallied along with palladium on the headline but ended up down on the day following a very weak close.  Nickel maintained its recent momentum trading up another 2.31%, nickel has advanced almost $1000 in the last 3 trading sessions.


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