This week saw the largest plunge in US macro data in 11 weeks pushing us back towards the lowest levels since August. Fundamentals (macro and also micro- earnings) did have some impact - with stocks having their worst week in 5 months (but the S&P managed to bounce off its 50DMA) and despite carnage in its largest components, the Dow gained 10 points (of which -150 points were from IBM, GE, and MCD). Today saw a small recovery bounce amid low volumes driven by JPY weakness (testing back up toward 100 post G-20 silliness) and VIX compression as macro overlays were lifted and positions reduced. Gold gained on the day but silver lagged ending the week -5.5% and -11% respectively, with the USD gaining 0.77% on the week (as JPY weakened almost 400 pips off its Monday night highs). Treasuries traded in a 4-6bps range all week (and flow was quiet) but the long-end ended lower in yield by 2-4bps.
The S&P's worst week in 5 months, and nearly its worst since June...
but it seems like today was about bringing the NASDAQ and Trannies back in line off the S&P all-time highs last week...
Gold caps it worst 2-week run since 2008 but manages to close above the magical $1400 level...
US macro rolled over - with its worst week in 11 weeks...
JPY had quite a week - a 4 handle roundtrip...
Market breadth was very weak today and just like yesterday, was unsupported in general by other risk-assets...seemingly US equities enjoyed the company of the Europeans once again...
HYG tumbled very abruptly into the close also.
and market breadth was very weak... and the indices rolled over after the cash close..
Charts: Bloomberg and Capital Context
Congratulations to Capital Context's Dave Klein for winning the NAAIM's Wagner Prize for active portfolio management.