Risk in Reverse - The calendar is still a few days away from quarter end, but markets today are seeing some risk unwind of the popular positional trades. Yields have moved lower and the 10-year yield is sitting at 1.649%, the dollar has strengthened (watch the Aussie 100 day at 0.7610), the Russell is lower by another 2.3% (both growth and value down), Mega tech is higher (thanks to its correlation to yields). Utilities are the best performing (+1.4%) followed by Staples (+75bps), while Metals (-4.3%) are worst. That last sector is down on talk that China may release some commodity reserves to offset price strength. Also in commodities, Oil is -6.5% and just fell through its 50 day moving average (58.45), and next support is at $55. Today’s risk off is far different that the one seen last March, when the S&P 500 closed at 2237. Seems pertinent that Powell is testifying with Yellen on the anniversary of releasing mega monetary support.
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