Risk Off is Back? German Stocks Tumble Most Since 2008

Interesting to see of the reemergence of (downside) volatility in global financial markets. This applies especially on stocks that has recently soared to record highs.

On the German Dax and other major European benchmarks, from Marketwatch.com (bold mine)

German stocks slid 3% on Wednesday, knocked lower by a sharp rise in the euro against the dollar after weak U.S. growth data underscored anticipation the Federal Reserve will delay a hike in interest rates.

Germany’s DAX 30 DAX, -3.21% which has been a beneficiary of euro weakness this year, saw the biggest point decline since October 2008, down 378.94 points, or 3.2%, to 11,432.72. The drop also marked the largest percentage decline since March 3, 2014, according to FactSet data.

At the same time, the Stoxx Europe 600 SXXP, -2.21% fell 2.2% to 397.30, its lowest close since late March.

Blaming the euro…

Yet the biggest drop since 2008, the German Dax...

The Stoxx 600...

Here is what the news didn’t say...

Yields of 10 year German bunds spiked!

This comes as bond market mavens, Bill Gross and Jeff Gundlach has declared German bunds as a “short” opportunity of a lifetime. (chart above from Zero Hedge)

From Bloomberg (bold mine)

Investors gave the clearest sign yet they’re losing patience with the record-low yields on euro-area government bonds in a selloff that spared no market.

Yields on Germany’s bunds surged the most in two years as traders shunned an auction of the nation’s debt. Bond titan Jeffrey Gundlach of DoubleLine Capital egged on the declines, saying he’s considering making an amplified bet against the securities. His comments echoed Janus Capital’s Bill Gross, who once managed the world’s largest bond fund. He said bunds were the “short of a lifetime.”

The bond slump reflects growing angst among investors after the European Central Bank’s 1.1 trillion-euro ($1.2 trillion) quantitative-easing program sent yields to unprecedented lows from Germany to Spain. Emerging signs of inflation in the 19-nation economy are also hurting demand.

Growing signs of intensifying unintended consequences from ECB policies? And are these also signs of the spreading and deepening of fractures from a broken system?

Hmmm...