What is more emblematic of the divisiveness of the presidential election than the market's fascination with the auction process of one mid-cap, poorly functioning company, Twitter, that can perhaps even be taken to task for its showcasing of vitriolic behavior?
The acrimony has even spilled over into the currency markets with the body shaming of an algo trader as the media refers to the instantaneous 13 percent collapse in the pound as the result of a "fat-finger" mistake.
Sovereigns were the story this week and with the backup in yields, surprising to some but not to those who read last week's weekly, was the continued slaughter in yield-bearing equities. The mini taper tantrum in Europe, which began as rumors circulated about a reduction in the ECB's bond buying program (later clarified in the dated minutes of their last meeting), pressured prices. The yield on German bunds crossed into unfamiliar positive territory while the U.S. 10-year consolidated at 1.73 percent. Equity markets tried awfully hard to trade lower all week but always seemed to rally back, although, as Marines they would have failed, leaving behind the wounded, those yield plays whose valuations had been too far extended as investors sought to replace what central bankers had callously removed in the name of QE. Ultimately, on Friday, the sellers, abetted by a just strong enough jobs number and perhaps unsure about the impact of Sunday night's presidential debate, won the battle and equity markets closed ever so marginally lower on the week. With all the negative news, it was a win.
The Philadelphia Utility Sector Index, a proxy for dividend seekers, traded down 10 straight days before bouncing into the weekend, likely as short sellers uncharacteristically for this cycle booked profits. The yang was the monstrous rally in financials with Citi hitting a 52-week high and taking with it Wells Fargo in a soft rebuke to Senator Elizabeth Warren and Congresswoman Maxine Waters, the market casting doubt on the supposition that all their 250,000 employees are part of a criminal enterprise.