After a weaker open that saw a recovery in the first hour, stocks faded. Nothing huge. then a half hour back some selling started and stocks sold straight down.
The OPEC deal suffered a blow with Iran saying it could not support the deal in the current form. On the heels of this news, Saudi Arabia bonds, currency, banks accelerated their recent losses.
Surprisingly, oil has maintained gains and oil stocks are as well.
DB: Word is that funds and other banks are clearing excess cash from DB as well as positions. Much of this has to do with derivative positions. DB CDS are also jumping. This has a lot of look and feel of the LEH era though not at that stage systemically.
SP500 -22.00, -1.01%
NASDAQ -63.25, -1.19%
DJ30 -198.29, -1.09%
SP400 -1.22%
RUTX -0.78%
SOX -1.06
This is a pretty big knee jerk reaction and we will see how stocks respond after this initial blowdown. Looking at LH, DECK and other downside as the day to day volatility reasserts after 2 days upside following 2 days downside.
Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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