Fed to market…
If you believe in the maxim, don't fight the fed, then today was a problem for you…
Yellen – "We have been in an economy with low interest rates for some time, and that influences asset prices… Asset valuations are somewhat rich by traditional valuations like price-earnings ratios… Some asset valuations look high. There is no certainty about that.''
Williams – "I am somewhat concerned about the complacency in the market. If you look at these measures of uncertainty, like the VIX measure, or other indicators, there seems to be a priced-to-perfection attitude out there… The stock market still seems to be running very much on fumes…"
Fischer – Calls for “close monitoring” of rising risk appetites…"Equity P/E ratios are near top of historical levels… it would be foolish to think all risks eliminated… Sees notable uptick in risk appetites in asset markets… Corporate sector notably leveraged…"
Add to that Draghi, The BIS, Carney, and Dudley all noting financial stability concerns.
Nasdaq tumbled to the lows of the tech wreck day, as VIX topped 11…
With a second big daily loss…
Pushing NASDAQ into the red for June…
FANG Stocks were monkey-hammered (down over 4% from yesterday's highs)…
With NFLX leading the drop…
Financials ended green (higher yields) but everything faded as The Fed's trumivirate spoke and McConnell let them down…
As Investors rotated from high-beta Tech to the 'safe-haven' of Virtual Currencies…
Oddly, while VIX heads for a monthly drop (even with today's jump), S&P Sectors are mostly seeing notable rises in volatility…
Bonds were a bloodbath, with Treasury Futures biggest drop in over 3 months, erasing all of June's gains in one day
Yellen’s comments halted the rout in Treasuries, which began with a drop in EGBs after ECB President Draghi signals earlier in the day the central bank’s willingness to look through temporary factors weighing on inflation. For those who thought the US Treasury market was a bloodbath – Bunds imploded… The biggest spike in yields since Dec 2015 as EURUSD soared to Oct 2016 highs…
The Dollar Index tumbled for the 4th day in the last 5 to its lowest close since Oct 4th 2016.
Cable mysteriously flash-smashed shortly after 3pmET – no headline catalyst…but desk chatter was series of stops around 55DMA
Gold was higher on the day as the dollar sank…(retracing most of yesterday's flash-crash)
But most notably was the big reversal in bonds relative to crude futures…
via http://ift.tt/2seH7jY Tyler Durden