Santa Rally...?
An ugly day... just as we predicted
The bloodbath started in China, which was halted early on circuit breakers...
Europe was ugly...
And that dragged US Futures lower, which were not helped by weak manufacturing data, weak construction data, and not helped by overly confident Fed speakers, but shortly before the EU close a hug eblock sucked up all ther liquidity in futures and stalled the selloff. We rallied back to VWAP around 1995 in S&P then faded...
The machines did their best at 1101ET to stall the weakness, which ramped to VWAP before institutional selling started...
Cash indices saw Dow break to a 16,000 handle, S&P under 2,000, and Nasdaq under 5,000...before a late-dat $2-3bn MOC buy order out of nowhere lifted everything...
The moment 330ET hit, VIX was slammed (via rampant buying XIV - inverse VIX ETF) and S&P pumped back above 2000
Financials were worst, Energy best...
FANTAsy stocks all plunged with Tesla and Amazon worst...
But Apple managed to ramp back to green briefly as we supposed its ubiquitous buyback prgram stepped in...
US equities dropped to 3-month lows, catching down to high yield bonds' weakness once again - just as they did in August...
Financials tumbled to 3-month lows, catching down to the yield curve collapse just as they did in August...
Treasury yields dropped all morning but as Europe closed, sellers moved in lifting yields and reducing sme of the early flatness...
The US Dollar index rose on the day against the majors (as European buying beat Asia selling)...
And Asian FX tumbled to fresh 6 year lows against the USD...
Commodities were a mixed bag. Despite USD strengtrh, Gold surged over 1% buit silver was stalled when US growth was questioned and sent crude tumbling...
Crude ended the day lower as record gluts and weak growth trumped any war premium fears...
Charts: Bloomberg
Bonus Chart: Just as we warned last week, we have seen this pattern of global pass the illiquidity hot potato contagion before...
Bonus Bonus Chart: You know it's a bad day when...
Brian Williams says today's market action reminds him of his early days trading the 1932 market
— Bob Brinker (@BobBrinker) January 4, 2016