vrijdag 23 juni 2017

Banks Battered, Biotechs Best As Yield Curve Crashes To 10-Year Lows

Lots of chatter again this week about shrinking The Fed's balance sheet...


It's gonna happen no matter what and it is looming...


So The fed will be shrinking at $20-50bn a month going forward, will The ECB or BOJ step up and increase their buying to keep the ignorant dream alive?


For now, it appears not, this week saw G-3 Central Bank Balance Sheets drop the most in 2017...


Which perhaps explains why the dip-buyers were absent in the banks, the Big 4 Banks all suffered post-CCAR and all but JPM had a tough week (Financials had their worst week in the last 10)...


On the week, investors panicced back into Tech stocks (Nasdaq's 3rd best week of the year). Trannies ended the week red, Dow down 4 days in a row (to end the week unchanged), S&P managed to close green today to break its losing streak...


Driven by a collapse back to a 9 handle in VIX, S&P was pumped green for the day/week (despite a small rise into the close, VIX remains below last Friday Quad-Witch close)...


Dow down 4 days in a row as they just could not rescue it all the way today...


But we note that Nasdaq remains well below the FANG Crash levels...


Healthcare (Biotechs) and Tech (FANGs) were the only sectors green this week as Energy lagged (and financials flondered)...


Today saw a surge back into FANG stocks (retracing 75% of the Tech-Wreck drop) but the slightly broaders FANTASIA (FB, AMZN, NFLX, TSLA, GOOGL, CRM, INTL, AAPL) started to rol over after tagging the Fib 61.8% retracement of the tech wreck...


This was the biggest 2-day short squeeze in over 4 months...


And "Growth" dramatically outperformed "Value" this week...


Biotech stocks dropped very modestly today but spiked 9% on the week to 17 month highs, the best week since the election...


As Biotechs ripped, bank stocks slipped on a collapsing yield curve and loss of hope after CCAR...


30Y Yields dropped notably this week, (to 2.70%, the lowest since Nov 9th) as the short-end rose modestly...


The US Treasury yield curve slumps for the 6th straight week (longest streak since March 2016) to its lowest weekly close since 2007...


The Dollar Index ended the week modestly higher but closed down for the last 3 days...


Bitcoin rallied over 9% this week (the 9th weekly gain in the last 10)...


Gold managed to eke out a small gain on the week, rallying for the last 3 days back above its 100- and 200-day moving averages...


Gold and Silver danced around each other to end with the same small gains...


Of course, the week was also headlined by the bloodbath in black gold. This is the 5th weekly drop in a row (the longest losing streak since Aug 2015); RBOB also fell for the 5th week in a row to lowest close since Nov 2016...


A quiet week for macro data but both soft and hard data hit new cycle lows...



NASDAQ rallied on fun-durr-mentals...


Nothing bad happens anymore, since BAML's Global Financial Stress Index has collapsed to 3-year lows. However, judging by China's leading credit impulse, things are about to get exciting...