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Ebola Fears Take Shine Off Panic-Buying Surge In Stocks

Buyback-manipulated earnings produced the low-volume opening face-ripper everyone wanted and stocks took off, recovering yesterday's late losses and not looking back.Trannies were the big winners, led by a resurgence in Airlines (as Ebola in US is fixed) and, despite drastically lower than average volume, stocks kept lifting after EU close on a bed of AUDJPY and USDJPY... until 1450ET (when NYC Ebola headlines hit). Airlines were hit hard, S&P futures dumped back to VWAP, VIX was whacked back above 17, and the exuberant day transformed into merely a great day for stocks. Weakness in Treasuries and the HY bond ETF (despite notable compression in HY spreads) had the smell of a lot of HY issuance being hedged and unhedged but TSYs ended the day up 6-7bps (off their highs post-NYC-Ebola headlines). The USD rose for the 3rd day in a row taking gold lower. Copper (China) and Oil (Saudi) rose on the day (oil unch on the week).

 

Tale of two headlines...

 

Airlines ripped and dipped...

 

As traders instantly reached for VIX...

 

and S&P naged back top VWAP (on heavy volume)

 

Credit and bond markets seemed very driven by rate-locks and hedge needs after Europe closed. After Ebola TSY yields and stocks/HY dropped

 

Treassuries once again surged in yield during the European session but held those losses thru most of the NY session until Ebola hit...

 

The USD rose once again - 3rd day in a row, led by EUR weakness

 

And USD Strength took the shine off gold, silver ended flat but copper rose (China data) and Oil (Saudi supply cut)

 

 

Intrday historical volatility is surging...

 

Charts: Bloomberg

Bonus Chart: 7 Year Itch (well 30 quarters)...?