Following Europe's worst day in months, the US stock markets saw the biggest drop of 2013 today. For those shunning the brief period, aside from 12/28 swings, this is the worst drop in the S&P 500 futures since early November on a relatively high volume day. EUR's weakness was a major driver (just as it was on the way up) jawboned by various CEOs and leaders and pressured down to almost a 1.34 handle (down over 1% against the USD as JPY gained 0.6% against the USD). Treasury yields clattered lower - to Friday's lows - and credit markets remained much less exuberant (as stocks played catch-down). Gold was relatively bid even as the USD gained, testing up to $1675. Homebuilders continue to slip lower and with AAPL's ongoing demise, there was no OPEX/month-end pump to save Tech and implicitly the rest of the market. HY Bond ETFs and synthetics remain weak but selling is thin in bond-land - it seems everyone knows that the cash market can't stand a herd heading for the exit all at once.VIX jumped a considerable 1.75 vols to 14.65% - its highest close of the year.
It isn't much - a 1.35% drop from Friday's highs - but its the biggest PLUNGE since the year began in an inexorable rally in stocks... realized vol picked up too
As EUR weakness and JPY strength dragged the USD higher and hurt carry-funded trade everywhere...
As Stocks remain massively disconnected from credit...
as it is becoming evident that all those 'stuffed' managers are seeking alternative to hedge with - as opposed to selling down their holdings - the HY Adv-Dec line is beginning to crack...
and Gold managed gains, even as the USD gained...
as it catches up to Treasury yields and stock prices...
as VIX pushed to its highest close of the year - also notably divergent from stocks (and a motably flatter curve)
S&P500 futures held that magical 1490ish level once again - though we did not see the nortmal surge BTFD move off of it...
Source: Bloomberg and Capital Context
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Bonus Chart: McGraw Hill gets a slap on the wrist...
