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79 of 94 global equity indices ended the week red…

Global Capital Markets aggregate ‘wealth’ collapsed in the last two weeks (bonds first, then stocks).

China started badly and ended worse the biggest weekly loss since Jan 2016.

European stocks were a bloodbath, closing on their lows this week (second worst week since Jan 2016) at the lowest since Jan 2017…Italy was worst on the week (and is now in a bear market).

US equity markets were beaten like a red-headed stepchild. 

Catching down to the rest of the world…

But a late Friday afternoon bounce flattered them in the end (see you Sunday night).

All US equity sectors were red on the week led by Materials and Industrials (and Financials floundered today despite the earnings)…Utes outperformed (but were still down 1.7%)

On the month so far, it’s carnage:

  • Nasdaq 100 is on course for the worst month since Nov 2008
  • Small Caps are on course for the worst month since September 2011
  • S&P is on course for the worst month since August 2015 (China Deval)

Interestingly, Value/Growth ended almost unchanged on the week…

FANGs were down on the week, but bounced today…

Tech, Consumer Discretionary, and Healthcare all together at the top as best performers of the year (but well off the highs) – all other sectors are red for 2018 with Materials worst…

US Equity breadth is a disaster…

VIX spiked almost 9 vols on the week – the biggest weekly jump since March, doubling since 10/3 as the curve massively inverts…

And the Put-Call Ratio is spiking…

HY Bonds were right… again!

Corporate bond breadth was also a catastrophe this week… as new 52-week lows spike in IG and HY…

Away from the bloodbath in stocks, bonds were notably bid… (maybe they just needed that day off on Monday?)

With 10Y Yields dropping most in 5 months (after last week’s biggest yield rise since Nov 2016).

The yield curve flattened notably on the week…

The Dollar Index fell on the week (after two straight weeks higher)

But remains rangebound..

China fixed the yuan lower every day this week, clearly signaling something to Trump, as yesterday’s epic spike in Yuan roundtripped today..

Black Gold was battered (global growth/demand and inventories) as Yellow Gold surged…

WTI Crude had its worst week since May, testing down to a $70 handle…

Gold just had its best two-week gain since January.

Silver did not manage new highs.

What does it mean when the most systemically important banks in the world are down 26% from their highs and accelerating lower?


 

Stocks

  • The S&P 500 was up 0.5 percent as of 2:05 p.m. in New York, while the Nasdaq 100 gained 1.6 percent.
  • The Stoxx Europe 600 Index fell 0.3 percent, retreating from an increase of 1 percent.
  • The MSCI All-Country World Index rose 0.7 percent.
  • The MSCI Emerging Market Index surged 2.4 percent, the first advance in more than a week and the largest jump since March 2016.

Currencies

  • The Bloomberg Dollar Spot Index climbed 0.1 percent.
  • The euro declined 0.3 percent to $1.1562.
  • The British pound fell 0.6 percent.
  • The Japanese yen added 0.2 percent to 111.94 per dollar.

Bonds

  • The yield on 10-year Treasuries dipped one basis point to 3.14 percent.
  • Germany’s 10-year yield slid two basis point to 0.497 percent.
  • Britain’s 10-year yield fell four basis points to 1.633 percent.

(Bond Notes)

Treasuries gradually firmed during U.S. trading as stocks pared gains, leaving the S&P 500 with about half of its intraday advance shortly after 3pm New York time; financials led the retreat following 3Q earnings releases by JPMorgan and Citi.

Yields ended lower by ~1bp across the curve, leaving curve spreads little changed; 10-
year, was lower by 0.7bp at 3.142%, below closing levels since Oct. 2 and within 2bp of
its weekly low reached Thursday; it was ~9bp lower on the week.

Price action continued to be driven largely by equities, which gapped higher at the cash
open then pared gains led by regional banks, leaving S&P 500 more than 4% lower on
the week.

JPMorgan’s Marko Kolanovic said the worst of the rout is likely over now the selling forced by computer-driven trading strategies has run its course
Across front-end, eurodollar strip was little changed; demand for downside hedges was little changed; demand for downside hedges was back in favor with decent flows in Jun19 and Dec20 options. 

Commodities

  • The Bloomberg Commodities Index rose 0.2 percent after two days of losses.
  • West Texas Intermediate crude added 0.1 percent to $71.04 a barrel.
  • Gold decreased 0.5 percent to $1,217.82 an ounce.

 


-R.W.N II, yours in 322.

Untitled

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