"turmoiled" again today as Treasury yields spiked on a weak
auction and the implications of a budget deal that means more supply
is coming. This spooked stocks once again and XIV, the Inverse ETF,
tumbled at the open - after ramping stocks delusionally into the
open. As stocks got monkey-hammered again, so bonds were bid and
ended with a relatively small rise in rates as plunges in Risk-Parity
funds likely prompted forced delevering in stocks and bonds. Perhaps
most notably, credit spreads started to snap wider and rate
volatility spiked as equity market contagion spreads.
have swung from "extreme greed" to extreme fear" in a
record few days...
the mainstream media attempts to calm investors that this is a
"healthy pullback," one of their pillars of support just
snapped. HY credit spreads snapped wider to 10 month wides and even
IG spreads spiked...
should not be a surprise as HY and IG ETFs have seen major
credit investors fear rising rates more than anything else...
the last week has seen huge equity outflows from US ETFs...
as Risk-Parity funds see one of their biggest crashes in history...
Risk-Parity had another ugly day today as aggregate bond and stock
returns were negative...
bonds and stocks were sold...NOTE that as stocks dumped, bonds were
bid but that never stabilized stock flows...
cash markets the selling started at the open after a gap up...and
accelerated into the close!
lowest close since Nov 30th
show the chaotic manipulated swings...
helped by XIV still!!
is back above 35...
equity vol surged again...
the major US equity indices have broken key technical support
23954 - Dow closed at 23860 is in correction
2585 - S&P closed at 2581 in correction
6755 - Nasdaq closed at 6777, not in correction
are now underwater for 2018 (despite soaring rates?) and Tech is also
stocks were slammed, bonds actually ended the day with only modest
yield rises (though
plenty of vol)...10Y and 30Y yields are up on the week...
Yields reached new cycle highs and 10Y yields tested them...
yield spike early on, spooked stocks again...
rate volatility begins to surge...
Dollar Index ended the day practically unchanged after rallying
overnight (on Asia weakness) and selling off this morning...before
rallying back as carry trades were unwound...
the last 24 hours has seen incredible moves in offshore Yuan... Yuan
is 1.3% weaker in the last two days against the dollar - the biggest
drop since Aug 2015's devaluation...
the dollar's quiet day, crude and copper slid lower while gold and
silver trod water...
was back to a $60 handle and RBOB back at 1.75...
were volatile today but Bitcoin ended higher, extending gains from
the pre-hearing lows...
held above the $8,000 level but the correlation with VIX remains a
on CBC this afternoon - "Volatility
is here, embrace it, and we go back up again"
appears every asset class is starting to "embrace" the