The only sector of the S&P 500 that was not red today (and for that matter the week) is Tech as AAPL managed another wonderful 1.45% rally today (up 5.6% on the week - it's best performance in 3 weeks and notably AAPL hasn't had a down week since 1/13 -0.6%). As SNL might say, "we need more parabola". Volume was average (for equities and futures) today but bigger blocks came through to sell into the close ahead of the long weekend and tomorrow's early excitement. Financials once again struggled and along with Energy are the worst of the week but it is the majors (in particular Morgan Stanley) that has been hammered this week as MS is -8.2% from Europe's close on Monday with the rest of the TBTFs down around 6% - finally catching up to credit's weakness. Equities closed down marginally but sold off in futures after the close - back below VWAP - having dropped all the way to reconnect with IG and HY credit's less ebullient perspective this week (before credit extended its losses to its widest in three months!). Treasuries managed to entirely recover their post-FOMC spike closing near the low yields of the day/week with the 7Y belly outperforming on the week down around 5bps (with 30Y -1bps on the week). Commodities halted their descent (much to the chagrin of media commentators it seems) as Oil outperformed on the day (and into the green for the week) over $103. Gold and Silver are still underperforming the USD's gains on the week (up 1.4%) led by EUR and CHF weakness. FX chatter was dominated by the spike-save in EURCHF (taking out Goldman's stops) and the mirror CAD strength JPY weakness relative to the USD. It seems EURUSD has become relevant again as it heads back towards 1.30 the figure (3 months lows). VIX went briefly red around the European close and broke 17% before closing marginally higher on the day as the term structure steepened a little more once again.
AAPL's rampage remains intact helping avoid a red week for the Tech sector as financials and energy were the biggest losers of the week (and oddly along with Utilities for the day)...
and the major financials are still getting crushed - especially Morgan Stanley (as they pull back to credit's reality)...
But credit markets have now slid to almost three-month wides with high-yield spreads back to 1/20 wides as AAPL once again exerts its influence, diverging broad equity indices from reality...
Treasuries have recovered all of their post-FOMC losses (basically unch from that morning) as the 7Y belly has outperformed on the week and 2Y underperformed - dragging 2s10s30s (the popular carry trade) to one-month lows...
Commodities staged a modest comeback today - taking WTI into the green for the week - but Gold and Silver remain underperformers relative to the USD on the week...
FX markets, spooked early on by the test of Goldman's precious 1.20 stop in EURCHF, drifted USD stronger until the US open then trod water for the rest of the day - leaving the USD up 1.4% on the week (its strongest week since the first week of the year!)...
All-in-all, another weak day with volume dominating the selloffs and trickle back above VWAP. The impact that AAPL is having on broad equity indices and their now egregious disconnect from broad risk assets is becoming farcical. One can only wonder if and when a rebalancing occurs just what a hit the indices will take? Weakness after-hours in S&P futures suggests a little more anxiety into the weekend - but nothing like what was seen in Credit, Treasury, and FX markets from the perspective of risk-off.
Charts: Bloomberg
Bonus Chart: S&P 500 vs NYSE net new highs - divergence (another AAPL impact)...
