Q1 2016: Gold Glows Amid The Greatest Stock Market Comeback In The History Of Investing

The market ended red today...

 

But The Dow and The S&P ended Q1 in the green after a yuuge drop...

 

In fact this was the greatest comeback in the history of stocks... (Q1 2016's 11.3% drawdown is the biggest on record for a quarter that ended green)

 

While US stocks managed to scramble back into the green for Q1, European stocks (and especially banks) ended down hard despite Draghi's unleashing more buying...

 

But the Aug-Dec analog remains in place as we just dipped and ripped...

 

And breadth is playing the same unimpressed game as it did in Oct 2015...

 

This looks familiar...

 

But Gold (and Silver) are the biggest winners in Q1...

While stocks had a huge bounce their Q1 performance was meh, except Trannies

  • Dow Transports +5.9% - Best quarter since Q4 2014
  • HYG (High Yield bonds) +1.4% - Best Quarter since Q1 2014
  • Energy Sector +2.7% - Best quarter since Q2 2014
  • Treaasury Bond Index +2.95% - Best quarter since Q2 2012
  • Gold +16.1% - Best quarter since Q3 1986
  • USD Index -4.1% - Worst quarter since Q3 2010
  • Copper +2.4% - Best quarter since Q2 2014

Utes were the best sector in Q1 but Financials and Healthcare (biotechs) were battered...

 

Treasury yields end the quarter lower with the belly down a stunning 55bps and 30Y -40bps... not exactly what The Fed had in mind in Dec...

 

Having held steady for January, The USD Index tumbled in feb and further in march led by JPY strength, Cable was weakest in Q1 of the majors...

 

Crude remains red for the year in Q1 despite the USD plunge but copper managed to creep into the green. Gold and Silver soared...

 

*  *  *  *  *

March was an epic month of extremes...

  • S&P +6.99% in March - 2nd best month since Oct 2011
  • Financial Stocks +6.6% - Best month since March 2012
  • USD Index -3.7% in March - 2nd worst month since Sept 2010
  • WTI +14.1% in March - 2nd best month since Oct 2011
  • Treasury Index -0.1% in March - worst month since Nov 2015
  • Gold -0.4% in March - worst month since Nov 2015
  • HYG +2.2% in March - 2nd best month since June 2012

March equity performance is stunningly similar across all indices, with Trannies fading off their highs...

 

With Energy and Financials soaring...

 

Treasury yields end the month on a tear with 2Y lower and the rest of the curve modestly higher (despite the soaring stock market)...

 

The USDollar Index had a tough time in March. led by AUD strength (and JPY ended flat)..

 

Crude was the biggest winner in March (but fading as the short-squeeze ended) with gold unchanged...

 

*  *  *

On the week so far...

 

Post-Yellen, Stocks standalone as Crude, Gold and Bonds are practically unchanged...

 

VIX had its biggest monthly drop since Oct 2015...

 

While on the topic of VIX, we note that VXX shares outstanding has been soaring (since TVIX stalled amid 6 month highs NAV premiums)...

 

Treasury yields are collapsing into month-end...

 

The US Dollar index continued its slide today...

 

Copper and Crude slid today despite weaker USD but PMs were bid into month-end...

 

 

Crude soared 60% off its mid-Feb lows and is back in the green for the quarter. This was driven by the biggest surge in net spec longs (as shorts covered) since 2011. The last time this happened... oil fell 35% in the following 4 months...

 

 

Charts: Bloomberg

Bonus Chart: S&P is over 70 points rich to The Fed balance sheet currently...