Stocks Bounce In 'Pause That Refreshes' For Bears As Systemic Risk Surges

The last few days explained...

China started off weak but quickly ramped, pushing CHINEXT green for the week - briefly...

European stocks failed to be inspired by China and limped weaker with Italy worst today...

 

A chaotic open saw stocks bounced

...Nasdaq was levitated to unchanged on the week...

 

Futures show the indices chaotic swings and push for Friday's highs again...

 

All the major US equity indices remain well below their 200DMAs. Dow futs ramped to theoir 10/11 plunge l;ows - looks like we are going back down...

 

GE was a bloodbath back below $10...

 

MSFT tumbled back below its 200DMA and bounced...

 

FANGs were mixed all day (AMZN and NFLX red, FB and GOOGL green)

 

But we note that AMZN may have lost its battle with retailers

 

But we have seen these size drawdowns before - will it be different this time?

 

Despite stocks bounce, credit markets continued to crack wider as cash markets catch up to derivatives...

 

Treasury yields limped higher today as stocks bounced with 30Y underperforming...

 

10Y yields bounced off unch for the month...

 

For now bond yields are up and stocks are down for the month...

 

The Dollar Index is up for the 4th time in 5 days making new 2018 highs (highest since May 2017)

NOTE - the USD is up over 2% in the last 10 days - the biggest surge since May.

 

Offshore Yuan drifted near its cycle lows...

 

Cable tumbled to near August cycle lows after S&P said it now sees a no-deal Brexit as a rating consideration...

 

Cryptocurrencies trod water after yesterday's tumble...

 

Despite the surge in the dollar,. silver was flat today (after yesterday's tumble) but copper and crude slid notably...

 

WTI Crude fell to a $65 handle intraday as oil suffers its worst month since July 2016...

 

Gold slipped back to support...

 

Finally, we note the pros' risk indicator in the market - that of implied correlation (or true systemic risk) - has spiked to its highest since February...

And judging by Goldman's Financial Conditions Index (modeled by Bloomberg's Sebastian Boyd), the S&P has plenty of room to fall further...