Small Caps Suffer Worst Quarter In 3 Years; Bonds Leading Year-To-Date

Despite the ubiquitous v-shaped recovery in stocks from the US open to EU close (decoupling entirely from bonds), stocks slumped into the end of the quarter leaving the S&P and Dow barely positive for Q3 and Russell 2000 down 7.9% – its worst quarter since Q2 2011 (and -4.9% year-to-date). Treasury yields flip-flopped around in a 4-5bps range with a late-day ramp (suggesting liquidations cough PIMCO cough) leaving 30Y -1bps on the week. The USDollar suged higher in the European session and traded lower in the US session. The bigger news on the day was the carnage in commodities that appeared to occur around the European close (desk chatter of commodity fund liquidations). Silver and WTI Crude were monkey-hammered, gold and copper dropped to down 1% on the week. VIX pumped and dumped again but closed above 16. Stocks closed very weak with Russell tumbling to not "off the lows."

Year-to-date, bonds are the big winners (long-end +14.2%) with the Dollar and S&P up around 6.7%, Gold unch, and Silver -12.7%.

On the quarter, Russell 2000 is the big loser but it was hardly a big one for the rest of the US equity market… (woirst Quarter for S&P since Q4 2012)