Market Summary by Macromon
Another ugly week for equities led by non-China Asia.Starting to see a flight to quality as 10-year yields coming in a bit.U.S. credit blowing out again
VIX has doubled in October
Lumber still in timber mode as homebuilders now down 30 percent from highs
Commentary:
The S&P is on pace to be the fourth worst October since 1950 and, if no bounce and a 0.5 percent cum decline by Wednesday will make it the third worst, only surpassed by 1987 and 2008. Bad Company. Equities are way oversold and many companies ready to exit their restricted window on buybacks. If we don’t get a bounce next week, markets have a much deeper problem than the garden variety correction the cheerleaders are touting.
Nevertheless, many forces are converging to keep us in the bunker over medium-term. Political uncertainty — recall we expect a political earthquake in eight days. Expect, women, young, and left. The U.S. bond auctions are sputtering and central bank U.S. debt purchases are over.
Angela Merkel took another hit in elections in the central region of Hesse today, ergo more instability for the German governing coalition. Watch the euro