Monthly Archives: April 2013

Risk Assets Rebound from Yesterday’s Sell-Off

The S&P 500 rebounded today after experiencing its biggest drop in five months yesterday. Consumer staples performed best according to the SPDR’s, while T-Comm and Utilities performed poorly. The VIX settled back down, coming in -3.1% to 13.96. Treasuries yields rallied, with the 10yr note climbing +4bps to 1.72%. The dollar was weak on the day, with the Dollar Index declining -0.76%. This morning investors got a report that indicated housing starts climbed +7% to a 1.04M annual rate, the most since July 2008. The median estimate of 80 economists had called for a 930M annual rate. Record low mortgage rates and the high-demand for rental units should keep residential construction a pillar of the expansion as concern grows that federal spending cuts will slow the world’s largest economy.

SPX Down -2.3% & VIX At 60 Day High on Chinese Growth

The S&P 500 dropped -2.3% to 1552 while the VIX rose +5.21% to 17.27, the highest level in 6 months. Technically speaking, the index is nearing its 50 DMA as near-term support. I like looking at the Fibonacci levels as well.

Weak Chinese GDP figures began weighing on SPX futures in early morning trading. GDP rose +7.7% in 1Q YoY compared with the median forecast of 8%. Other reports showed industrial production rose less than estimated, while retail sales growth matched estimates.

´╗┐China’s growth weighed heavily on the commodity markets as well. The S&P GSCI Index of 24 commodities sank to the lowest level since July 2012, with gold tumbling -9.26%, the most since 1980, while silver fell -15%. Take a look at our gold ETF, the GLD: