US Stocks Erase All Post-QE3 Gains, Tumble To Fed Balance Sheet 'Reality' Once More

For the first time since early March, The Dow dropped back near 17,000 earlier (down over 1000 points from the pre-Brexit peak) with a modest bounce off the EU close lows. However, this plunge across risk assets has erased all post-QE3 gains with Trannies down 20% since Oct 2014. Having been almost 200 points 'rich' to the Fed balance sheet, it appears reality is setting in once again and risk is mean-reverting.



Which, once again, reverts S&P to its Fed Balance Sheet implied level...

FV is around 1960 - but as we saw in Aug 2015 and Jan 2016, the market must overshoot before The Fed will jawbone it back to hope.

Charts: Bloomberg


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