And now back to your regularly scheduled rally.
Trump condemned white supremacists (good), Trump associates talked back the threat of nuclear war (also good), people remembered stocks only go up (bigly good).
So…. dips were bought!
The VIX was back to doing what it’s supposed to do, which as a reminder is: “nothing.” Hilariously it traded right back to its one-year average of 12.4-ish:
In Asia, things were “great again,” as shares in South Korea, China, and Hong Kong all rebounded:
And it was the same story in Europe, as the DAX, the CAC (which erased all of its “Macron bump” last week) and the FTSE all rose. 19 out of 19 Stoxx 600 sectors were up; financial services was the most active +1.1% on 208% 30-day average volume followed by insurance +1.0% on 138% average volume.
Japan was the odd man out in terms of equities as stocks fell despite great GDP data (remember: bad news is good news and good news is bad news in terms of expectations for further stimulus/easing):
As Bloomberg notes, “haven flows retreated; gold and Treasuries dropped, extending losses after the Fed’s Dudley said he backs another rate hike in 2017 and a balance sheet announcement is seen coming relatively soon while the broad dollar index gained, led by losses in CHF.” Here’s a little snapshot/context:
And a bit more on that franc move via Bloomberg:
It was a horrible day for crude, which tumbled as China’s oil refining plunged the most in three years last month, offsetting the ostensibly bullish Sharara news:
“I think we’re seeing some strength in the dollar, and the preponderance of news seems to be favoring the bears right now,” Phil Flynn, senior market analyst at Price Futures Group in Chicago, said earlier, adding that “when it came to the China refinery runs being down in July, that’s adding to the perception of slowing demand.”
That was exacerbated by the dollar, which had a decent day and got a little extra boost from NY Fed boss Bill Dudley who told AP the following: “I would be in favor of doing another rate hike later this year.”
Every retail investor on the planet: “I told you so”…