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Dollar & Stocks Jump; Bonds & Bullion Dump In Lowest Volatility September Ever

Courtesy of ZeroHedge. View original post here.

It has now been 318 trading days since the S&P 500 suffered a 5% drawdown – the 4th-longest streak since 1928… So everything is awesome…

BUT…US 'hard' economic data has not been this weak (and seen the biggest drop) since Feb 2009…

*  *  *

Q3 Was a Roller-Coaster…

Q3 was the 8th straight quarterly gain in a row for The Dow – the longest streak since Q3 1997.

The Long bond was unch, gold up 3.2%,. but stocks outperformed in Q3…

Nasdaq just outperformed Small Caps on the quarter as stocks reversed their down-trend seemingly around Yellen's J-Hole speech…

Treasury Yields are mixed for Q3 with 2Y notably higher but the rest of the curve barely budged…reversing early gains on Draghi's hawkish comments…

Interestingly the yield curve – 5s30s – ended unchanged on the quarter (after 5 quarterly declines in a row)…

The Dollar declined for the 3rd quarter in a row as Gold managed to eke out some gains as oil soared…

*  *  *

On the month…

  • 3 Giant Storms – Harvey, Irma, and Maria crush Texas, Florida, and Puerto Rico
  • Trump threatens "fire and fury"
  • Kim tests H-Bomb
  • NoKo fires missiles over Japan
  • NoKo says Trump 'Declared war'
  • Healthcare bill fails again
  • 6th monthly decline in a row for US 'hard' economic data

September is now in the books and it's official - it was the least volatile September for stocks in history…

Source: LPLFinancial

Some high- and low-lights for September include:

  • Small Caps best month since Nov 2016
  • Financials jump most in 3 months to record high
  • 2Y Yield's biggest spike since Nov (to its highest since Nov 2008)
  • Yield Curve (5s30s) flattened most since June (to flattest since Nov 2007)
  • USD Index had best month since Dec 2016 (ending 6 month losing streak)
  • Gold's worst month since Nov 2016
  • Industrial Metals worst month since Dec 2016
  • Oil's best month since Apr 2016

Bonds & Bullion were the month's laggard as stocks and the dollar surged…

Trannies & Small Caps ripped…

As Energy, Retailers, and Financials were best (year's laggards)…

AAPL was a notable laggard in September as FANGs managed small gains…

Equity market gains were also driven by hopes about taxes…

September was an ugly month for Treasuries…(worst month since Nov 2016 for bonds)

The Dollar Index reversed its medium-term downtrend in early September after Draghi's comments…

It appeared to also coincide with the lagged upturn in President Trump's approval rating…

Notably EURUSD suffered its first monthly loss since February breaking the longest run of monthly gains versus the dollar since January 2013… as 1.20 seemed like the line in the sand for Draghi…

Oil had a big month as PMs and Copper dropped…

*  *  *

Finally we focus down on this week…

The Dow was the laggard on the week, barely scratching out a gain as Small Caps surged – Russell 2000's best week since Dec 2016

Dow was rammed above 22,400 into the close…

But while Small Caps have ripped, high-tax names appear unimpressed by Trump's plan…

FANG Stocks manage to recoup all of Monday's losses…

Banks continue to decouple from the yield curve…

Notably XIV – the inverse VIX ETF – hit a new record high today…

As VIX closed at a weekly closing record low, monthly closing record low, and quarterly closing record low…

Treasury yields all rose together this week by 6-8bps…

The Dollar Index rose 1% on the week – its biggest weekly gains since Dec 2016, led by Aussie and Euro weakness…(NOTE last two days have seen some give back)

Bitcoin +15% on the week, -12% in September (worst month since Aug 2016), +66% in Q3 (4th quarterly gain in a row)

Crude rallied on the week as PMs slipped lower…

And finally, a quick reminder – stocks have never… ever… been more expensive than this…


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