An impressive chaotic day in stocks and bonds as both markets appeared confused as to whether jobs bad news was good, if the jobs bad news was bad enough, and if Syrian bad news was actually good news in holding off the Taper a little longer. The Dow seemed the trigger for all things today as the collapse on Putin's statement slammed the Dow into the red for the week (which would have made 5 weeks in a row, something we haven't seen since the US downgrade in 2011). That was clearly unacceptable to someone, and the Dow soared 220 points on no news whatsoever to break the all-important "Mission Accomplished" level of 15,000. Once that farce was over, we started to fade and then on news of Syrian government "gas" shelling, we tumbled back into the red (with the Nasdaq and S&P practically unchanged again). Treasuries rallied off their just-greater-than 3.00% yields with their biggest intraday plunge in yields in weeks on a slow-growth (or Taper-off) bid exaggerated by Putin's comments, only to sell-off back to pre-Putin by the close. Gold, Silver, and Oil all surged not looking back after the jobs and Putin news.
It should come as a surprise to noone that the S&P 500 futures closed perfectly at VWAP as the morning's very heavy volume selloff was rescued on no volume... to trade perfectly up to the 50DMA... Today was the heaviest volume day in the S&P futures in two-and-a-half months...
But it really was all about the Dow today...
but indices closed the week green - ending the Dow's weekly red close streak at 4...
So that's why we bounced (Dow Red for week)... but here's why we sold off at the end... we got back top unch to Kerry's initial warmongery...
Treasuries were just as shizophrenic today though the overall strength remained. Yields did bounce higher on jobs data but started to drop soon after as "Taper off" belief spread, then a safety bid from Putin supported them... only for them to drift back higher in yield to pre-Putin levels into the close (ignoring the "gas" news)...
Today's rally in 5Y bonds was the 3rd biggest yield decline in 17 months and yet another 3-sigma swing since Taper talk began...
and oil and precious metals jumped on the jobs data (Taper off?) and then kept rising on Syria concerns. WTI closed above $110 - its highest close sicne May 2011.
Charts: Bloomberg