VIX & Stocks Surge For Second Day Amid Bond Bloodbath

Invaluable advice..."seriously you are not fucking listening"

 

Stocks surged to record-er highs early on...Small Caps were today's best performer (up over 1.5%!), 13th record close for The Dow post-Trump

 

On the week, Small Caps are up over 5.5% post-Italy!

 

Pushing the S&P 500 near cycle high P/Es...

 

But Casino stocks stumbled on Macau capital controls chatter...

 

Bank Stocks have now been 'overbought' for a record 20 days in a row...

 

"Most Shorted" stocks were higher once again but no kneejerk rip this time...

 

Aside from the continued melt-up in stocks, the most notable aspect of today's market was the second day in a row of significant VIX-S&P correlation (something that is relatively unusual)...

 

Record S&P 500 Call options volume... (note that the record put options volume hit on 8/21/15 almost marking the V-bottom in stocks)

 

Since Trump's election, the VIX curve has collapsed...

 

And CSFB Fear Barometer (measuring skew in options pricing) has collapsed too...

 

Notably bond market 'risk' is at its highest relative to stock market 'risk' (based on implied vols) almost ever...

 

The last time equity-bond vol was this separated was 5/21

 

And finally, the yield spread between stocks and bonds has now widened to over 30bps - the widest since July 2015...

 

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Ok, having got that off our chest, let's look at the rest of the markets...

The ECB's comments sparked the biggest steepening in yield curves since Oct 2008...

 

US Treasury yields bloodbath'd higher again

 

The USD Index surged back to unchanged on the week thanks to EUR weakness post-Draghi...

 

Crude rallied back after breaking below $50 overnight, but remains lower on the week...Silver remains higher on the week (but faded today)

 

Finally - because it's just funny - Italian banking stocks are the best performing market in the world this week...