Highlights:

• Substantial weakness out of Europe dragged down US stocks initially and they were unable to overcome the selling pressure despite a rally attempt that began in the early afternoon
• US stocks finished down 1.2% on the day with all 10 economic sectors down at least 1% and materials down a hefty 2.9% on an equal weighted basis
• The defensives were really the leaders today even though Financials hung in there fairly well
• Another terrible day for Volkswagen as it finished down another 17%
• Tech is availing itself as the leadership group off of the 8/25 low
• Over the last year, sector leadership continues to be Health Care, Discretionary, Tech and Staples with Energy the clear laggard despite the oversold bounce off of the 8/25 low that has faded
• The VIX was up “only” 10% today despite the broad based selloff
• EMs were down .9% on the day as with Asia the standout laggard and EM Americas hanging in there quite well all things considered
• DM Knowledge Leaders outperformed by about 44bps while EM Knowledge Leaders outperformed by about 22bps
• Over the last year Developed World and Emerging Markets Knowledge Leaders have bettered DM and EM stocks by 7.4% and 7.2%, respectively
• Over the last year, DM stocks are down 8% and EM stocks are down 23.3%
• Not surprisingly given the tough day in stocks, bonds were bid pretty much across the board with the US 10Y dropping about 6bps
• The USD was strong on the day as gained ground on the euro, pound and Ausi dollar, but the flight to “safety” drove the yen up about 40bps
• Energy finished up nicely again today, but the real show was in copper as it declined about 3.6% and is closing in on its August low

Gavekal Capital Daily Financial Markets Chart Wrap

Sign up for reports from Gavekal Capital