No safe havens

Jason Goepfert

So much for a safe haven

The normally staid bond market has been gyrating wildly, and it’s unlike any investors have experienced for decades. The daily percentage changes in 10-year Treasury note futures has averaged nearly 2.5 standard deviations over the last two weeks. The only time that exceeds this was the blow-off peak in October 1998.

Wild swings in bonds z-score

Going back to 1982, for bonds this kind of volatility coincided roughly with two peaks and one trough. For stocks, it proved to be a boon…eventually. 

Huge dollar spikes

The U.S. Dollar Index spiked over the past 7 days as investors and traders scramble for cash. The spike we just saw was even larger than during the worst of the 2008 crisis.

Dollar big rallies

When the USD Index spiked more than 6% in the past 7 days, it rallied further before peaking as the momentum didn't let up for a while.

Big dollar rallies

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We also looked at:

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  • A time-scaled price comparison to the 1929 crash
  • Breadth has never been worse
  • News articles are piling on to the bear market and recession ideas
  • Investors have moved back into equity mutual funds
  • Hedge funds have low exposure to stocks
  • Wall Street is panicking
  • Investors are fleeing weak companies
  • Sentiment in Germany has plunged
  • The yield curve is jumping with a (for now) low unemployment rate
  • Most days are closing within 15% of their intraday high or low
  • Commodities in one sense have never crashed this much