Ezekiel 25:17

Ok, so that was the week…

“Fire and fury!”

“Locked and loaded!”

“Like nothing the world has ever seen”

“And I will strike down upon thee with great vengeance and furious anger those who would attempt to poison and destroy my brothers. And you will know my name is the Lord when I lay my vengeance upon thee!”

 

Got it? Because that about sums up the rhetoric from Trump and Kim, and the impact on financial markets was “big fucking league.” Or as “big league” as “big league” gets considering we’re still operating in a regime that’s dominated by policy makers running the fiat printing presses hotter than a balmy morning in Mar-a-Lago.

This week, U.S. investors discovered that stocks can go down as well as up:

SPY volume was elevated this week as nuclear war forced people to snap out of the summer lull and trade:

Here’s a YTD VIX chart (no explanation necessary):

The Nasdaq “VIX” hit a 19-handle this week:

“Something’s amiss” in vol of vol (highest since the yuan deval):

Market breadth keeps getting worse as the Russell and the S&P equal-weighted index continue to underperform:

The Kospi party is over – plain and simple:

The index is down four days in a row, the won is falling, and South Korea CDS (although still relatively sanguine compared to previous provocations that frankly don’t seem nearly as momentous as what’s going on now) is widening out:

The Hang Seng took it on the chin as well with a Chinese government probe into Tencent serving to make a bad situation worse:

Panning out to a more 30,000 foot view, the MSCI Asia Pac ex-Japan is hanging its hat on an arbitrary green line, which is ironic, because you can bet that if Kim crosses Trump’s equally arbitrary red line, this chart will look a lot worse – and right quick:

Europe was a complete debacle – everything was down sharply for the week:

The CAC 40 has now wiped out the “Macron Bump”:

The junk bubble is in trouble, as a roller coaster week saw yields hit a 5- week high just days after hitting a three-year low:

The dollar has gone into “meandering” mode:

10Y yields are sitting near their lowest since June:

Oil took a backseat to the rest of the news flow this week but ultimately logged its second straight weekly loss after the IEA suggested OPEC compliance with output cuts is delaying the ever-elusive market rebalancing. Weekly charts on this have become almost meaningless, so here’s a zoomed out visual that screams “nowhere fast” at the top of its chart-lungs:

The yuan was the market’s new “safe haven” asset, hitting a one-year high against the dollar and becoming notably overbought in the process…

… so naturally the PBoC slammed the brakes on with a weaker-than-expected Friday fix which promptly sent the onshore yuan tumbling the most since January against the dollar:

You’re reminded that this week came just as 100% of institutional investors and 99% of retail told Yale that they were positive the Dow would be higher a year from now:

And if you’re still asking yourself “what could possibly go wrong?” you might want to consult the following helpful map from BofAML, which shows that Pyongyang isn’t the only thing you need to concern yourself with geopolitically speaking:

Have a nuclear weekend…