These Charts Show Just How Bad the Selloff in Risk Assets Is

Why the Recent Market Decline Is Different Than Previous Selloffs

The bloodletting in global risk assets is getting worse.

The S&P 500 Index and the Dow Jones Industrial Average are both down more than 5 percent from their Jan. 26 record closes. The Cboe Volatility Index, commonly known as the fear gauge, has spiked to its highest level since February 2016.

If the S&P 500 holds that 5 percent drop into the close, it would be the first time since June 27, 2016 -- halting a record streak of more than 400 days without one.

The front of the VIX futures curve remains deeply inverted, with the spread between the front and second-month contracts poised to have back-to-back sub-zero sessions for the first time since August.

After failing to return to positive territory twice this morning, the S&P 500 Index is visiting its 50-day moving average for the first time since September.

There’s barely anywhere to hide. All 11 main S&P 500 sectors are in the red. Among its 24 subgroups, only retailing as well as technology hardware and equipment are eking out gains on the day as of 1:56 p.m. in New York.

West Texas Intermediate futures are in the midst of their biggest one-day retreat in 2018, down more than 2 percent as of 2:20 p.m. New York Time.

Other risk assets are also taking it on the chin, with investment-grade and junk bond exchange-traded funds are each down more than 1 percent this month.

As bad as things are in the U.S., it’s just as bad of a day to hold higher-beta assets. The MSCI Emerging Markets Index is on the verge of its second loss of more than 1.5 percent in the past week.

Heavy selling of stocks has even helped short-circuit what’s been cited as the proximate cause of the retreat: soaring yields. The 10-year Treasury note, another favorite of risk-averse investors, has seen its yield fall two basis points on the day.

Gold and the Bloomberg Dollar Spot Index are both up on the day as investors seek safety. The traditional haven in foreign exchange, the Japanese yen, is the best-performing G-10 currency.

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