Dip-Buyers Dominate As Bonds, Stocks, Dollar Shrug Off China Threats

The day started off with some excitement...

But by the close all was forgotten...

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China put the fear of god into a few bond traders this morning...(30Y spiked 5bps higher only to close down 1bps on the day)

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And prompted the herd-like response proclaiming that this is it - bond yields are blowing out. However, thanks to a super-strong 10Y auction, bonds were bid back into the green leaving 10Y yields lower on the day...

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And the yield curve flattened dramatically...

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All the major US equity indices closed lower (except for Trannies which ramped into the close), but were well off the lows...

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Equity futures show the full excitement of the day better than the cash open to close...

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VIX was briefly punched back above 10 on China and more shenanigans around the cash open/VIX auction but closed below 10...

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High yield bond prices continue to tumble...

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Breaking back below its 50-, 100- and 200-DMA...(almost unchanged now on the year)

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The Dollar Index ended lower but followed the same pattern as everything else today as it plunged on China headlines but it spiked after headlines about US pulling out of NAFTA struck... then faded again after The White House statement that Trump's position had not changed...

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The peso and loonie tumbled... but then rebounded after The White House made the statement

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This NAFTA headline also slammed GM, Trains, and Constellation Brands (as well as Canadian and Mexican ETFs). The stocks rebounded modestly on The White House statement...

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Gold gained on the day (but gave back some of the China panic gains) as WTI ended the day lower marginally...

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Gold is outperforming Bitcoin YTD...

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In crypto land, ETH was the winner again and XRP the loser and BTC and LTC trod water. Notably, the crypto space rallied after Buffett's negative comments...

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Finally, Rudy Havenstein summed it up perfectly...

Today CNBC is literally and not just figuratively in the dark. pic.twitter.com/q2MDl8R2T9

— Rudolf E. Havenstein, Anti-Davos Man (@RudyHavenstein) January 10, 2018