Thursday was extreme dispersion rather than broad risk appetite. In the US one stock carried the tape: the S&P 500 rose 0.7% to 7'731 and the Nasdaq 1.6% to 26'541, the Dow Jones only 0.2% to 53'569. Breadth told the real story: the equal-weighted S&P 500 fell 0.3%, the S&P 600 small-cap was flat and technology was the only S&P 500 sector higher.
Europe went the other way: the STOXX 600 lost 0.7% to 652, the FTSE 100 0.8% to 10'793 and the Swiss SMI 1.1% to 14'384. Paris was the epicentre, the CAC 40 shedding 1.7% to 8'320, its worst session since 8 July, as the three large French banks fell 3.9% to 4.9%; the DAX was the outlier at +0.3% to 26'367.
Asia is firmer this morning, the Nikkei 225 closing up 0.4% at 66'406, the Hang Seng up 0.2% at 25'604 and the Shanghai Composite flat at 3'956.
Rates did nothing to help. Stronger US data, with July PCE at 3.7% year-on-year and core at 3.3%, kept a further hike alive into today's Jackson Hole keynote, lifting the 2-year Treasury a basis point to 4.20% and the 10-year a basis point to 4.67% for a 2s10s of 47bp; the Swiss front end stays anchored by an SNB policy rate of 0%.
Gold added 0.2% to $4'599 while Brent jumped 2.1% to $89.70 on reports the Strait of Hormuz remains mined despite US clearance operations.
