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Markets:
- Gold up $3 to $1844
- US 10-year yields down 7 bps to 2.79%
- WTI crude oil up 95-cents to $110.83
- S&P 500 up 0.1%
- Nasdaq -0.3%
- NZD leads, EUR lags
The weekly decline in the S&P 500 was the seventh in a row, which is the longest streak since 2001. The worst-ever streaks were 8 weeks in 2001 and 1970. I’ve attached from forward returns after 6, 7 and 8 weeks below from Compound Advisors.
There’s plenty of focus on stocks at the moment. The S&P 500 opened higher then was down more than 2% at the lows but recovered very late in the day to finish fractionally higher.
What’s interesting is that the correlation with FX has broken down.The dollar was generally softer today and yen crosses were largely higher. That’s a shift from the recent trend.
Bonds are also offering a different tone with yields down for the second week in a row. That might reflect risk aversion but it at least makes the argument that deleveraging has run its course, at least for now.
In terms of intraday moves, it was a chop in FX. The price action was ultimately sideways on most fronts in New York trade, though cable closed near the highs and the euro closer to the lows.
There was a steady bid in the kiwi. It along with the Australian dollar both tested the Asian lows and held, then moved up.
CAD lagged its cousins but not dramatically. Oil was higher once again as the incredible resilience continued. That wasn’t much of a help for the loonie though as concerns about housing mount. Note that Canada is off on Monday for a holiday.
Have a great weekend.
