Blame The Russians, The Chinese, The North Koreans, and The Welsh... but not The Fed...
Overnight saw more China turmoil.. (MSCI China ETF saw its biggest drop since Brexit)
With China 'VIX' spiking to 2017 highs...
Then Europe followed through with Corporate credit markets crashing by the most in 18 months...
The cost of insuring against non-payment jumped the most this week since February 2016, when the oil price slump heightened default risks of energy companies and their bankers.
And while stocks bounced today in US, the week was not pretty.
Summary:
- Dow's worst week in 5 months (Mar '17)
- S&P's worst week since pre-election (Nov '16)
- Russell 2000 worst week since Feb '16
- Financials worst week in 5 months
- VIX biggest percentage spike since Aug '15 (China Deval)
- HY Credit Risk biggest jump since election (Nov '16)
- Silver's biggest week since Jul '16
- Gold's biggest week since Apr '16
- Ofshore Yuan's best week in 7 months (Jan '17)
Russell 2000 was the week's biggest loser (worst week for Small Caps since Feb 2016); Nasdaq is down 3 weeks in a row (worst week in last 7)
As Small Caps outperformance since the election has been erased...
Nasdaq was unable to break back above its 50DMA...
But it is the S&P 500 that is most worying to technical anlysts as this is the longest its held under the 50DMA since April...
Today's modest bounce was very weak as Buy-The-Fucking-All-Out-Nuclear-War-Dip'ers did not show up en masse...
Retailers were ugly bnut Energy and Financials suffered this week...
FANG Stocks suffered their 3rd losing week in a row, dropping to one month lows...
Retailer Rout returned this week...
For the worst week since Dec 2016...
VIX reached as high as 17.28 today - its highest since the election...
The VIX term structure inverted for the firs time since May...
Market Breadth (by any measure) remains dismal...
Credit markets were really ugly this week - as we noted above, Europe was a bloodbath - but US HY Corporate bond risk spiked 30bps - its biggest jump since the election...
Treasury yields tumbled on the week - pushing towards YTD low yields and entirely erasing any payrolls losses...
And at the very short-end, T-Bills are signaling early October debt ceiling deadline...
But while VIX shot up at the short-end this week, it remains relative ignorant of any debt ceiling concerns...
The Dollar Index closed lower for the 4th week of the last 5, erasing last Friday's post-payrolls ramp...
JPY has strengthened for 5 straight weeks against the USD, Yuan also surged this week (best wek in 7 months) with commodity currencies weakest...
And as the dollar sank, Bitcoin had its best week since pre-Brexit anxiety sent the virtual currency surging in June 2016... to a new record hiugh at $3550
WTI found resistance at $50 and support at $48 this week but ended lower...
Gold surged on the week as safe-haven buying sent the precious metal to $1298...
The last few weeks have seen gold and Bitcoin moving together...
Finally, we note that last week it was FX risk that spiked, this week it was equity's turn. What snaps next week?
Bonus Chart: "Probably nothing"
Bonus Bonus Chart: Maybe Gundlach's favorite indicator is wrong this time...