Requiem For 2017: The Year In Charts

Here we are at the end of 2017, a year that saw Donald Trump ascend to the highest office in the land and a year that saw financial assets the world over continue to inflate on the back of trillions in central bank liquidity.

This was also the year of the cryptocurrency and the year that left everyone asking about the “everything bubble.”

In a tribute to what was all at once a boring year (no volatility) and the most exciting year in recent memory (from a geopolitical perspective), we thought we’d bring you a visual retrospective courtesy of the following series of charts.

Enjoy. Or don’t. Whatever.

U.S. stocks hit record after record after record. The Nasdaq was the standout and, ironically given the Trump mania, small-caps were the laggard:

The disconnect between policy/geopolitical uncertainty and market measures of vol. was one of the stories of the year:

(Goldman)

Correlations collapsed…

Which helped vol. remain glued to the flatline…

There were only two days when big-cap tech, energy, and banks fell 1% during the same session…

In another testament to the low vol. regime, consider this from BofAML:

The highest intraday print this year of the VIX was 17.28 (the highest closing print was 16.04). This is the second lowest annual high in history (since 1992). The lowest annual VIX intraday high was less than half a vol point lower at 16.99 in 1995, when the S&P 500 gained a staggering 34% for the year. For comparison, in 1993 and 2005, the 3rd and 4th bars from the left, the S&P 500 gained 7% and 3%, respectively.

This is the great “rotation”:

Worst year for the dollar in more than a decade and the best year for the euro against the greenback since 2003:

Remember how “long USD” was the “no-brainer” trade going into 2017? Yeah, well that’s how that turned out.

As for that other “no-brainer” trade headed into the year (short USTs), all you have to do is look at positioning to see how sentiment changed on that:

The U.S. reflation narrative died on the vine – or at least according to the curve, which was the story of the year in bond land:

Overall, it was a mixed bag for “Trump trades”:

In credit, spreads approached 2014 tights, although there were some hiccups along the way:

Record high grade supply:

In Europe, equities weren’t as ebullient as U.S. stocks, in part due to the effect of the stronger euro (see above), but overall it was still a great year:

Broadly, EM FX and equities logged their best gains since 2009:

The Cboe EM ETF volatility index very nearly posted its biggest monthly drop since July 2016 in December. It’s ground steadily lower as EM equities advanced:

Speaking of the yuan, don’t forget that at one point, the PBoC engineered an epic short squeeze:

The Nikkei hit its highest level in more than two decades:

And the Hang Seng crossed 30,000 for the first time since 2007:

Here are some of 2017’s commodities winners:

Millennials moved back into the basement this year:

(Wells Fargo)

And that’s at least partially due to the massive student debt overhang. Outstanding student debt eclipsed the USD junk bond market in 2017:

In the cryptoverse, Bitcoin passed the tulip bubble for the most egregious speculative mania in history:

But its gains in 2017 were dwarfed by Litecoin, Ethereum, and Ripple, with the latter up a truly laughable 30,000% YTD:

This is probably all that matters going forward:

BofAML: pic.twitter.com/MJMA96cNIx

— Heisenberg Report (@heisenbergrpt) December 12, 2017

and another from Deutsche… pic.twitter.com/kGQuzJdr6U

— Heisenberg Report (@heisenbergrpt) December 12, 2017

Cheers to you in the new year…