Well, it would be virtually impossible to come up with a better clip than this one to sum up today’s action in the US:
As detailed here earlier, JPMorgan’s own Marko Kolanovic, known affectionately as “Gandalf” appears to have triggered a rather abrupt turn in sentiment at 12:30 EST when his latest note began circulating among traders.
“I come back to you now”…
“Volatility near or at record lows by a handful of measures should give pause to equity managers,” Kolanovic warned, before cautioning on the pernicious feedback loop embedded in markets courtesy of the interplay between short vol. vehicles and systematic strats that, thanks to suppressed vol, have likely levered up and could be forced to unwind into a falling market.
Here was the “turn of the tide,” in stocks…
….and in the VIX (which spiked to an 11-handle following yesterday’s plunge to a record low around the Fed decision)…
…and in USD/JPY….
The DAX underperformed in Europe, thanks in no small part to Deutsche Bank and Bayer, whose shares both fell notably after results:
The euro took a breather after surpassing its 2015 August high on Wednesday falling to a fresh low for the day at 1.1650 before rebounding. Basically, this was profit taking.
Also notable was EURCHF hitting 1.12 for the first time since the SNB abandoned the floor:
The broad dollar had a better day, recovering from the post-Fed doldrums:
Oil was a bit of a rollercoaster, but ultimately hit another 8-week high as sentiment is bullish as reflected in Bloomberg’s weekly survey which yielded the following results:
And it’s easy to understand why, with the inventory data inflecting, the Saudis making promises, and the threat of disruptions from Venezuela.
