Stocks Spanked; Gold Glistens; Currencies Crushed; And Bond Bears Battered

Quite a day...

• All-time record lows in many Emerging Market Currencies (TRY, ARS, VENZ (unof.) most)
• Nikkei 225 -3.75% - biggest drop in 7 months
• Emerging Market Stocks -3% - (4 month lows)
• USD Index -0.7% - biggest drop in 3 months (2014 lows)
• USDJPY -1.3% - biggest drop in 5 months
• AUDJPY -2.35% - biggest drop in 7 months (4 month lows)
• Dow -1.3% - biggest drop in 5 months (5-week lows)
• 30Y Treasury Yield -9bps - near biggest drop since April 2013 (2-month lows)
• Gold +2.3% - biggest gain in 3 months (2 month highs)
• VIX +1.8vols - biggest jump in 3 months (1 month highs)
• IG Credit +2.5bps - biggest jump in 5 months (1 month wides)
• HY Credit -$0.5 - biggest drop in 4 months (1 month lows)

It seems that without the safety net of Fed flows, the reality that bad news might just be bad news and event risk is a real risk just started to hit home. The deer is back...

Early weakness on the China PMI contraction dropped US equity futures to Tuesday's congestion zone then BoJ being less than dovish provided further weakness to Tuesday's lows and despite almost CNY 400 billion in liquidity this week, short dated repo rates are not recovering notably in China (and CDS continued to widen). Data in the US was weak (with 1.4 million dropping off the rolls of EUC and existing home sales missing) and European data improved (hurting the USD further)... so having said all that - it seems foolish to pin today's weakness on any or all of this "news" - simply put, JPY strength (particularly AUDJPY thanks to AUD weakness on China and JPY strength on BoJ) dragged the major stock indices in Japan and the US lower and carry trades were unwound en masse...

AUDJPY vs S&P 500...

Trannies didn't bat a well-mascara'd eyelid today as the rest of the world slumped... leaving the gap between Industrials and Transports as big as we can remember...

Since the taper, things have escalated for Healthcare and de-esclated for Discretionary and Homebuillders...

Notice today's bounce began when the Dow tapped its Taper-day highs

The late day ramp was funded by VIX selling...

which enabled the S&P to recapture VWAP perfectly...

Gold and Silver surged today - as did WTI oil (slamming Breant-WTI to 6 week lows)...

Credit markets widened notably and stocks played further catch down...

Treasury yields tumbled today...

Charts: Bloomberg

Bonus Chart: Emerging Markets ETF tumbled notably...