The Halloween Yen Massacre Sends Market To All-Time Highs

Headlines:

  • USDJPY rose 2.7% today - biggest day in 18 months back to Oct 2007; +3.7% on the week - bighest week since Dec 2009
  • Nikkei +7.7% today - biggest day since March 2009; +10% on the week - biggest week since Dec 2009
  • Russell 2000's up over 6% - best month in 15 months
  • Russell +1.2% year-to-date
  • Nasdaq at March 2000 highs
  • 5Y yields up 12bps on the week - biggest increase in 6 months
  • 2Y yields up 11bps on the week - biggest increase in over 3 years
  • 5s30s flattened 10bps on the week - biggest flattening in 7 months
  • Silver -6.1% on the week - worst week in 16 months
  • Gold -4.7% on the week - worst week in 16 months

Perhaps the look on Jeff Cox's face sums up the day as talking head after talking head stepped up to reassure investors that the market is not beholden to central banks despite the most in-your-face example of it since the PPT in 2008.

Shorts were squeezed the most on the week since Dec 2011

 

Oddly, despite all the mainstream media hype, being "short" the weakest balance sheet companies (based on Goldman's "most shorted" index) has actually outperformed all major stock indices year-to-date...

 

But year-to-date bonds remain the biggest winners, silver the big laggard and the S&P up exactly the same amount as the USD....

 

October ended up being quite a month for stocks... best month for Small Caps in 15 months

 

And off the Bullard QE4 lows...

 

as the week's strength was all about fundamentals...

 

The day was odd to say the least - all the action occurred overnight and stocks actually faded off opening highs all day... until the close when we melted up...

 

As any question of sustainability was thrown out the window as VIX was heavily bid... until the late day when it melted up

 

HY Credit was not buying the exuberance either...

 

as stocks and bonds swung around each other...

 

Of course it was really all about USDJPY and Nikkei - that is a 1230 point rally in the Nikkei! and a 3 handle rip in USDJPY

 

Kuroda is happy

 

Nikkei's move since the FOMC in context

 

On the week, Treasuries closed higher in yield with a notable bear flattener... (30Y +2bps, 5Y +12bps)

 

The USDollar was strong all week, especially post FOMC as EUR and JPY weakness dominated

 

Commodities were weak as the US rallied but PMs were crushed...

 

Charts: Bloomberg