Silver as an investment

Bondmageddon Sparks Crude Carnage & Biggest Stock Slump In 7 Months

Oops…Compared to recent lack of volatility, today was indeed a bloodbath and the week was the worst week for stocks in 7 months…

 

Dovish Rosengren's confidently hawkish comments seemed to spark this, sending rate hike odds notably higher (and not sparking confidence in the market)…

 

And rate hike odds are rising as macro data dumps…

 

But blame Draghi for starting it…

 

Before today's tumult, realized volatility had collapse to a 45 year low…Volatility has rarely been lower. We can argue about the cause but the facts are clear: S&P 500 one-month trailing realized volatility has dropped to 4.8, its lowest level since 1971.

 

Some context for today's move – Equity market at post-Brexit cliff-edge…

 

Stocks catching down to fundamentals?

 

Today's moves were impressive… Dow -392 points!! *S&P 500 SINKS 2.4% IN BIGGEST SELLOFF SINCE JUNE 24, *DOW AVERAGE LOSES 392 POINTS IN BIGGEST DECLINE SINCE JUNE 24

Today's closes were very technical…

  • The Dow closed at its 100-day moving average 18,085, biggest weekly drop since the first week of January
  • S&P biggest weekly drop since early Feb, closing just above 100-day moving-average at 2120.
  • Russell 2000 biggest weekly drop since Feb, closing at 50-day moving average at 1217.
  • Nasdaq biggest drop since April, closing below its 50-day moving average at 5134.
  • Trannies closed below 50-day moving-average at 7841.

On the week it was ugly, worst week since February…

 

The S&P closed below its 2015 highs…

 

"Most Shorted" stocks plunged… (biggest drop since Brexit)

 

On the day, homebuilders lost the most ground (worst day in 3 years), but this was the biggest drop in financials since Brexit..

 

Financials and the yield curve have begun to converge…

 

VIX soared…

 

Jumping most since Brexit…surging above its 200-day moving-average…

 

Today was the 11th biggest jump in VIX in history… (h/t @Stalingrad_Poor)

 

Notably most 'risk-parity' indices are end-of-day only, we found one fund in Canada that trades – The Horizons Global Risk Parity ETF – and today was ugly (as we expected)…Bonds & Stocks slammed on the week

 

Total bloodbath in bondland today with the long-end getting slammed… Worst 2 days for 30Y in a year – few things to consider – major issuance demands rate-locks, Japanese reverse twist chatter contagion, ECB losing faith at long-end, and finally Congress signed the 9/11 bill today allowing families to sue Saudi Arabia who have threatened to sell their Treasuries…

The entire curve is back to Brexit level highs in yields.

2s30s jumped around 12bps on the week (with a bear steepening) – the biggest weekly steepening since Jan 2013

 

Notably USTreasuries and Bunds tracked each other almost perfectly this week (as JGBs and Bunds managed to get back to 0% yield)…

 

The Dollar Index ended the week lower, despite a notable rise in the last two days (led by Cable and commodity currency weakness)… Yen strengthened on the week.

 

Dollar strength slammed into commodities with crude giving back yesterday's inventory gains and silver rolling over notably… (gold and silver closed below their 50DMAs)

 

Today's crude retracement of yesterday's inventory drawdown…

 

Charts: Bloomberg

Bonus Chart: A gentle reminder of how well things are going in the 'economy'

 

Bonus Bonus Chart: Still over 200 points to go in the S&P before fair value to The Fed Balance Sheet

 

Bonus Bonus Bonus Chart: Stocks year-to-date…