Despite an impressive ramp by USDJPY in the last two hours of trading (thank you Nomura and BOJ) whose purpose was to get the DE Shaw and all other correlation algos to push spoos higher, today's trifecta of the ugly guidance by Visa (which dominated the DJIA), very ugly earnings by Amazon (which dominated the Nasdaq) and the CME ES margin hike just proved too much, and while Friday may have been the new Tuesday following 11 "green" DJIA Fridays in a row, today's 123 point drop stopped the trend before lucky 12 out of 12.
As can be seen on the chart below, after hitting daily all time highs for several consecutive days, today's drop pushed the S&P back to levels last seen during last week's MH17 scare. A tactical near-term downgrade of stocks by Goldman in the last few hours of trading (following David Kostin's upgrade to his S&P price target two weeks ago) probably didn't help although (actually it helped since stocks rose since the time the Goldman report hit mailboxes) it is amusing that someone still thinks Goldman sellside research still has any sway (as opposed to merely indicating what the Goldman prop desk is not doing).
And while today was otherwise a rather mundane day, what stood out was an impressive ramp in gold toward the end of trading, and especially in the minutes before the close, which we attribute to rising geopolitical fears as both the situation in Ukraine and in Israel are getting worse by the minute.
In short, this week was largely a wash which makes sense ahead of next week's data slam when we get both the all important NFP and Q2 GDP prints. While NFP will almost certainly be a continuation of the part-time jobs soaring trend seen in recent months, the biggest question is whether Q2 GDP will print above or below 2.9%: if below, then the entire first half of 2014 will be negative, which according to some purists is equivalent to a technical recession. A bigger question is what climatic event will the scapegoat crew blame a collapse in Q2 GDP on,