Summary
- Turkey continues to get crushed across the board with 10-year blowing out another 40 bps on the week to over 21 percent
- EM bond markets hammered
- U.S. credit continues to behave well
- Euro periphery spreads widening with Italy out to 282 bps over Bunds
- EM FX weaker led by South Africa
- The dollar index closed above crucial 50% weekly Fibo (see chart), recovering half of the 15 percent correction from January 2017 to February 2018
- Global stocks weaker; the U.S. closed higher, however
- Fewer and fewer country ETFs are green on the year
- Lumber bouncing after vicious bear market
- Crude weaker
- No shine for the metals with copper now down 20 percent YTD
Commentary: Just back to the desk and have been out of touch. It looks like we may be wrong on our call in Q1 U.S. stocks had entered a bear market — the S&P500 index is now less than 1 percent from an all-time high. Nevertheless, we still don’t like equities – unless for a trade, and that is becoming exceedingly difficult to make money — here and expect volatility to spike beginning in September through rest of year. See our post, Feels Like 1997.
