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

Summary:
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… [embedded content] BUT…US ‘hard’ economic data has not been this weak (and seen the biggest drop) since Feb 2009… US Data Surprise Index, 2006 - 2017 - Click to enlarge 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… Gold(see more posts on Gold, ) - Click to enlarge Nasdaq just outperformed Small Caps on the quarter as stocks reversed their down-trend seemingly around Yellen’s J-Hole speech… Yellen J-Hole Speech - Click to

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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…

US Data Surprise Index, 2006 - 2017

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

- Click to enlarge

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…

Gold

(see more posts on Gold, )
Dollar & Stocks Jump; Bonds & Bullion Dump In Lowest Volatility September Ever

- Click to enlarge

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

Yellen J-Hole Speech

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

- Click to enlarge

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…

Treasury Yields, Jul - Sep 2017

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

- Click to enlarge

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

US Treasuries, Dec 2015 - Sep 2017

(see more posts on U.S. Treasuries, )
Dollar & Stocks Jump; Bonds & Bullion Dump In Lowest Volatility September Ever

- Click to enlarge

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

Gold and Silver Prices, Jul - Sep 2017

(see more posts on gold price, silver price, )
Dollar & Stocks Jump; Bonds & Bullion Dump In Lowest Volatility September Ever

- Click to enlarge

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…

S&P 500 Daily Range. 1970 - 2017

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

Source: LPLFinancial - Click to enlarge

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…

Gold, S&P 500 and US Treasuries

(see more posts on Gold, U.S. Treasuries, )
Dollar & Stocks Jump; Bonds & Bullion Dump In Lowest Volatility September Ever

- Click to enlarge

Trannies & Small Caps ripped…

Trannies, Small Caps and Nasdaq

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

- Click to enlarge

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

Energy, Retailers, Financials, Tech and Utes

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

- Click to enlarge

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

FANG and AAPL

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

- Click to enlarge

Equity market gains were also driven by hopes about taxes…

High Tax Corps and Market, Sep 2017

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

- Click to enlarge

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

US Treasuries, Sep 2017

(see more posts on U.S. Treasuries, )
Dollar & Stocks Jump; Bonds & Bullion Dump In Lowest Volatility September Ever

- Click to enlarge

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

Bloomberg Dollar Index, Oct 2016 - 2017

(see more posts on Dollar Index, )
Dollar & Stocks Jump; Bonds & Bullion Dump In Lowest Volatility September Ever

- Click to enlarge

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

US Dollar Index, Jul - Oct 2017

(see more posts on U.S. Dollar Index, )
Dollar & Stocks Jump; Bonds & Bullion Dump In Lowest Volatility September Ever

- Click to enlarge

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…

Euro and USD Index, Oct 2016 - Sep 2017

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

- Click to enlarge

Oil had a big month as PMs and Copper dropped…

Gold and Silver Prices, Sep 2017

(see more posts on gold price, silver price, )
Dollar & Stocks Jump; Bonds & Bullion Dump In Lowest Volatility September Ever

- Click to enlarge

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

The Dow

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

- Click to enlarge

Dow was rammed above 22,400 into the close…

The Dow

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

- Click to enlarge

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

High Tax Corps and Market, Sep 2017

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

- Click to enlarge

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

FANG Stocks, Sep 2017

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

- Click to enlarge

Banks continue to decouple from the yield curve…

Banks and Markets, Sep 2017

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

- Click to enlarge

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

VIX ETF

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

- Click to enlarge

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

VIX

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

- Click to enlarge

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

US Treasury Yields, Sep 2017

(see more posts on U.S. Treasuries, )
Dollar & Stocks Jump; Bonds & Bullion Dump In Lowest Volatility September Ever

- Click to enlarge

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)

Currencies, Sep 2017

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

- Click to enlarge

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

Bitcoin Price, Jun - Sep 2017

(see more posts on Bitcoin, )
Dollar & Stocks Jump; Bonds & Bullion Dump In Lowest Volatility September Ever

- Click to enlarge

And then there’s real bubble… Swiss National Bank -2% on the week (worst week since May), +26% in September (6th monthly rise in a row), +98% in Q3 (most since 1997)

Swiss National Bank, Jun - Sep 2017

(see more posts on Swiss National Bank, )
Dollar & Stocks Jump; Bonds & Bullion Dump In Lowest Volatility September Ever

- Click to enlarge

Crude rallied on the week as PMs slipped lower…

US Crude Oil, Sep 2017

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

- Click to enlarge

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

S&P 500 Nonfinancial Energy and Tech, Jan 1991 - 2017

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

- Click to enlarge


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Tyler Durden
ZeroHedges' Tyler Durden is the hero of Fight Club, the 1999 movie based on Chuck Palahniuk's novel that reflected Chuck's experience in the Cacophony Society Quote: "Goddamn it, an entire generation pumping gas, waiting tables, slaves with white collars. Advertising has us chasing cars and clothes, working jobs we hate so we can buy shit we don’t need. We’re the middle children of history, man. No purpose or place. We have no Great War. No Great Depression. Our Great War’s a spiritual war… our Great Depression is our lives. We’ve all been raised on television to believe that one day we’d all be millionaires, and movie gods, and rock stars. But we won’t. And we’re slowly learning that fact. And we’re very, very pissed off."

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