{"id":31861,"date":"2018-03-03T09:01:58","date_gmt":"2018-03-03T14:01:58","guid":{"rendered":"http:\/\/olduvai.ca\/?p=31861"},"modified":"2018-03-03T09:01:58","modified_gmt":"2018-03-03T14:01:58","slug":"weekly-commentary-cracks","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=31861","title":{"rendered":"Weekly Commentary: Cracks"},"content":{"rendered":"

Weekly Commentary: Cracks<\/a><\/h3>\n
After posting an inter-week high of 25,800 on Tuesday, the DJIA then dropped 1,583 points (6.1%) at the week\u2019s Friday morning low (24,218) – before closing the session at 24,538 (down 3.0% for the week). The VIX traded as low as 15.29 Tuesday. It then closed Wednesday at 19.85, jumped as high as 25.30 on Thursday and then rose to 26.22 in wild Friday trading, before reversing sharply to close the week out at 19.59.<\/p>\n

Friday\u2019s session was another wild one. The Nasdaq Composite rallied 2.6% off early-session lows to finish the day up 1.1%. The small caps were as volatile, with an almost 1% decline turning into a 1.7% gain. The Banks had a 2.8% intraday swing and the Broker\/Dealers 2.4%. The Biotechs had a 3.7% swing, ending the session up 3.2%. The Semiconductors had a 3.3% swing, gaining 1.8% on the day.<\/p>\n

Friday morning trading was of the ominous ilk. Stocks, Treasuries, commodities and dollar\/yen were all sinking in tandem. The VIX was spiking. Japan\u2019s Nikkei dropped 2.5% in Friday trading, with Germany\u2019s DAX down 2.3% and France\u2019s CAC losing 2.4%. The emerging markets (EEM) were down as much as 1.7%. For the week, the DAX sank 4.6% and the Nikkei fell 3.2%. Curiously, bank stocks outside of the U.S. came under notable pressure. European banks (STOXX) dropped 3.5%, Hong Kong\u2019s Hang Seng Financial Index 4.5% and Japan\u2019s TOPIX Bank index 3.4%.<\/p>\n

There are cracks – cracks in the U.S. and cracks spread globally. This week\u2019s market gyrations suggest these interconnected fissures will not prove transitory. VIX traders on edge. Risk parity and the CTA community on edge. ETF complex? Everything\u2019s turned correlated. Hedges have become expensive, and the Treasury hedge isn\u2019t working. The yen has taken on a life of its own. Central bankers playing coy. How long can all of this hold together?<\/p>\n

This was never going to end well. It\u2019s just that raging bull markets are willing to disregard so much. Fully inebriated by the bottomless libation of easy money, markets in speculative blow-off mode gleefully ignore about everything. President Trump had stated he wanted tariffs.<\/p><\/div>\n

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…click on the above link to read the rest of the article…<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Weekly Commentary: Cracks After posting an inter-week high of 25,800 on Tuesday, the DJIA then dropped 1,583 points (6.1%) at the week\u2019s Friday morning low (24,218) – before closing the session at 24,538 (down 3.0% for the week). The VIX traded as low as 15.29 Tuesday. It then closed Wednesday at 19.85, jumped as high […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[57,85,7756,9257,216,1450,303,1849,3650],"class_list":["post-31861","post","type-post","status-publish","format-standard","hentry","category-economics","tag-bank-of-japan","tag-boj","tag-credit-bubble-bulletin","tag-djia","tag-dow","tag-equity-markets","tag-fed","tag-financial-markets","tag-us-federal-reserve"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/31861","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=31861"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/31861\/revisions"}],"predecessor-version":[{"id":31862,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/31861\/revisions\/31862"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=31861"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=31861"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=31861"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}