What The Bank of Japan gives, The Japanese Finance Ministry taketh away...
Artist's impression of the last few days in crude, JPY, and US stocks...
Oil closed under $30 after Russian productiuon and OPEC denials... From bull market to correction in 2 days - This was the worst 2-day drop in oil since January 2009...
And today's other major driver - exploding US bank risk...
USDJPY started to snap today as JPY and NKY erased half their post-BOJ NIRP shifts...
But everything was awesome yesterday? US equities erased all the post-BOJ NIRP gains...
The worst performer today was Trannies and Small Caps as even Nasdaq was hammered despite GOOG earnings hope...
Since The Fed hiked rates, Bonds & Bullion have soared as Crude and Stocks have plunged...
Why F.A.N.G performance diverging? FB and GOOG both very strong sets of #s – and both are ad rev plays unlike AMZN and NFLX (both of which are underperforming).. but in the end the selling pressure was universal in high beta tech.
As YHOO flounders around desperately...
Sectors breakdown...
- E&P weakness– APC's Al Walker on his CC seemed to be complaining, for lack of a better term, about how Moody’s and how the other rating agencies may change the methods by which they rate E&P companies. Causing some concern today along with poor S&P 500 and WTI Mar ’16 technicals – Sisto, sector specialist
Energy credit was a bloodbath...
- Media underperforming – GOOG and FB competitors for the media ad revenues, some think the strong GOOG #s show them taking money from the media plays
- Transports weak DAL prasm # inline, F and GM #s show Car sales continue to be very weak
- Healthcare lower; More neg press on drug price hikes “Shkreli Not Alone in Drug Price Spikes as Skin Gel Soars 1,860%” http://washpost.bloomberg.com …VRX hit on speculation of circulation of House of Rep committee documents that mention the company specifically with regards to drug prices -ttn
- Financials hit as US 10Y falls to multi month lows
It's not over yet...
- Utes outperformance is impressive. The group has now outperformed the S&P by 14.5% since the day of the fed hike. Flows continue to be driven by LO buyers, but todays action feels XLU driven as i'm quiet and haven't seen any meaningful prints go up
Vroom...
VIX started to pick up... but remains anything but panic land. It would appear that equity exposure is being reduced dfirectly rather than synthetically through a hedge...
Many traders have noticed that volatility in the last hour of trading has increased significantly in recent weeks.
CS notes that while true, we find that the increase is not isolated to the end of the day. Rather, the effect stems from an increase in overall intraday volatility levels throughout the day. The ratio of the high-low move in the last hour compared to the whole day is actually not far from the norm. In January, the price swing in the last hour was about 40% as big as the whole day’s swing.
Treasury yields collapsed today... 10Y at 1.85% is the lowest since April 2015...
Today's yield plunge was the biggest drop since June 2015
The yield curve has collapsed... 2s10s is flattest since Dec 2007!!
The USDollar Index extended its losses today... very notable strength in JPY today as commodity currencies gave some recent gains back...
Gold & Silver were flat today as copper and crude flailed...
The crude oil roller coaster continues... with increasing volatility...
Charts: Bloomberg