Yesterday's violent US selloff was so sharp that US stocks are now back to where they were in the middle of January after peaking in September. And as noted earlier, the rout has spread with stock markets in the rest of the world following lower.
Meanwhile, as Nomura's Bilal Hafeez noted last Friday, the key markets to focus on after the real yield shock were FANG stocks and credit: sure enough, both markets have now tumbled, with US HY spreads widening sharply...
... and the outperforming US sectors incorporating FANGs have all tumbled with the defensive health sector now the top performer in the US.
Fast forward to today, when in his latest note, the Nomura strategist writes that the bank's cross-market risk monitor is now clearly in risk aversion led by these markets, but what stands out is the lack of response from EM, which is not in "risk aversion".