Another Friday, another green close (now ten in a row) as Treasuries suffer their biggest weekly yield rise in a year. Another new-er-er all-time nominal high for the Dow but Nasdaq was the winner on the week (+2.7%) against a cluster of the rest at +2.4%. Volume was sub-par at best, trade-size low, and market breadth diverged bearishly but that didn't matter. Financials, Consumer Discretionary (and builders) were the sectoral winners up around 4%. Away from stocks, things are moving quite seriously: the USD is up for 5 weeks in a row - its biggest 5-week run in 9 months (and highest in 9 months); WTI crude outperformed in commodities (despite the USD strength) back up to 6-week highs; JPY had its worst (which is good apparently) week in 23 months losing 2.5% against the USD back to almost 4-year lows; Silver and Gold had their best (and only positive) week in 5 weeks. Credit markets (like TSYs) played catch up and snapped tighter on the week (even though HYG tended to underperform). VIX did drift lower (-0.5 vols to 12.5%) but remains well north of where stocks would expect. The much-vaunted late-day ramp came as usual and lifted all the indices to their opening (post-NFP spike) highs. As a gentle reminder, the Dow is up 613 points in 9 days - that is all.
Bonds suffer biggest weekly yield jump in a year...
as Equities surge to new highs...back in the trend channel...
- accompanied by low and bearishly diverging volumes...
and TRIN...
VIX is moving ion the right direction but protection remains relatively bid...
as the VIX term structure shifts to its steepest this year...
Trannies recover but Nasdaq leads on the week...
Stocks got a little over-excited into the close and retraced back to where credit/rates/vol were trading...
And the relationship between cash bonds (dark red), the HY bond ETF (light red) and stocks (green) is 'interesting'...
Bonds and stocks recoupled but the USD didn't...
JPY weakness rules the carry risk-on game for now...
Just a whacky notion here but the weakness of breadth in equities suggest institutional selling - and VIX was well bid before this big jump - which makes us wonder if the big boys are actually unwinding their protection (hence small drip lower in VIX) and selling down their single-stock exposure into this surge.
Charts: Bloomberg and Capital Context
Bonus Chart: Financials have retraced 38.2% of their overall high to low loss... but seasonals are not in their favor...
