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Market Recap: 1.11.2011

Tyler Durden's picture




 

Goldman's Henry Bowe summarizes today's cross market action.

Equities manage to post small gains despite a midday slide. A quick 5 handle drop in SPX had everyone waiting for the ‘fat-finger’ notification. Turns out there was just a large seller. Perhaps an equity / bond reallocation? USTs did suddenly go bid as stocks went offered. But hard to understand the rationale for that type of trade on 11 Jan.  Mixed performance under the hood– oil & gas up 1.5% but telecomm down about the same. SPX closes up 5 at 1275. The DOW closes up 34 at 11672. The NASDAQ closes up 9 at 2717.

The VIX ended the day down -.65 at 16.89, closing sub-17 for the first time in twelve days.

EURUSD posts sharp intraday moves – I count 4 different 30 minute periods where the pair covers 50+ pips – but ultimately is contained to a 1.29 handle. Chalk this up to 1) headline whiplash 2) positioning: a large number of modest EURUSD shorts lacking conviction after 2 days of consolidation. Though its worrisome that the EURO couldn’t post a more significant rally on a day where sovereign credit spreads tightened so significantly, there were also a fair number of EUROs sold at bad levels. The upshot = more chop and consolidation unless this week’s auctions from Portugal or Spain bring an extreme result. Elsewhere inFX, the sell-off in US rates helps lift USDJPY and USDCHF. USDMXN makes new lows as the end of the NY session brings in aggressive selling interest. Models selling on IMM close perhaps? Below 12.03 and the chart is wide open.

The US rates market sold off over the course of the morning, finally building in a concession ahead of 3y supply.  As expected, the $32b auction went well, coming 0.5bp through the 1pm level and the market traded well post-1pm.  We saw light flows with only modestly better buying in belly from FM and treasuries closed the day 1.6- 4.1bps weaker across the curve, with the exception of bonds which outperformed. In swaps the 5y5y point led the move lower and we saw real money and fast money accounts fading the move either by receiving outright or selling payers.  Tomorrow brings the 10y auction as well as supply in Portugal.

Commodities finished higher across the board today with palladium up over +4%, while oil closed up +2.2% after a presidential panel investigating the BP Gulf spill called for “urgent reform” and producers suspended output from Alaska’s pipeline following the leak.  EIA also predicted today that 2011 oil demand would pick up, forecasting crude to average $93 this year.  Flow-wise, we saw quite a bit of long-rolling of energy, along with some profit-taking in Brent as spreads widened substantially.  Also interesting to note that cotton traded limit up today.

Credit tightened on thin volume, mostly following European sovereign indices, with spreads closing at 86.25 in IG (-2.75bps) and 103 1/8 (+1/2) in HY.

Tomorrow brings the Portuguese bond auctions, Euroland and Indian IP, UK trade balance, and Brazilian retail sales. The Bank of Thailand also meets tomorrow (25bp hike expected, in line with consensus) and Geithner will speak on China

 

 

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Tue, 01/11/2011 - 19:39 | 868587 Gloomy
Tue, 01/11/2011 - 19:43 | 868598 Gloomy
Gloomy's picture

If China and Japan are buying Euro debt you can be damn sure the Fed is too-big time. Then Euro does the same when the Japs and we implode. What a perfect little Ponzi scheme!

Tue, 01/11/2011 - 19:56 | 868627 Justin Credible
Justin Credible's picture

precisely.  everyone bails everyone else out and no one can fail.

perfect.

Tue, 01/11/2011 - 19:56 | 868628 Justin Credible
Justin Credible's picture

precisely.  everyone bails everyone else out and no one can fail.

perfect.

Tue, 01/11/2011 - 20:09 | 868659 Misean
Misean's picture

I'm sure there's an Escher diagram for this somewhere...

Tue, 01/11/2011 - 20:44 | 868745 molecool
molecool's picture

LOL :-)

Tue, 01/11/2011 - 23:32 | 869156 infinity8
infinity8's picture

HA! Perfect - that's where my mind goes when I think about "the world situation" - up/down those stairs. . . Whiskey!! (and dramamine)

Tue, 01/11/2011 - 20:42 | 868739 greenewave
greenewave's picture

The Establishment and Mainstream Media is losing control of the PEOPLE and as a result vehemently ATTACKING ALTERNATIVE NEWS. Suddenly, anyone that does not agree with the Socialist policies of the Obama Administration is an ENEMY OF THE STATE!

Watch the video “The Establishment is Losing Control” at (http://www.youtube.com/watch?v=6JIDs7Luwxg).

Anonymous-

“We do not have much time left before the FREEDOM of Americans is robbed by our leaders, the Internet Censored, Guns confiscated and the PEOPLE jailed for speaking truth!”

Tue, 01/11/2011 - 22:29 | 868997 Yardfarmer
Yardfarmer's picture

i spam therefore i am. idiot

Tue, 01/11/2011 - 20:59 | 868778 RobotTrader
RobotTrader's picture

While various anarchists are posting stories about the end of the world, end of capitalism, etc...

Asian stocks continue to celebrate.

Tue, 01/11/2011 - 21:55 | 868895 Robslob
Robslob's picture

No offense Robo...but simply put:

You are a piece of shit.

Tue, 01/11/2011 - 22:02 | 868920 nmewn
nmewn's picture

He never has a negative view...and his charts have a very short one ;-)

Tue, 01/11/2011 - 22:03 | 868927 Orly
Orly's picture

Four days of charts...?

And it's a "celebration"...?

I suppose with all those whipsaws, they were partying on pogo sticks?

/:

Those, however, are not "Asian" markets.  Those are Western markets located on the other side of the world.

Let's see Shanghai, Hong Kong and the Nifty Fifty for some real Asian flair...

Tue, 01/11/2011 - 21:57 | 868853 99er
Tue, 01/11/2011 - 21:56 | 868900 dudditz
dudditz's picture

A few days ago I was watching CNBC power lunch.  I watch CNBC to get a good laugh and to see what tactics and rhetoric they use to distort the truth.  Les Nessman (yea, thats what I think of him) used a graph to show the huge drop in unemployment from 9.8 to 9.4, but of course the scale was from 9.0 to 10.0, so it looked like a 40% drop!!

Everytime I think how the FED is turning our USTs into junk bonds and is putting the country into debt I feel like puking.

Equilibrium, you can pay me now, or pay me later.  You wont get any of my $$ Robot!!

 

 

Tue, 01/11/2011 - 23:01 | 869089 Mach1513
Mach1513's picture

Brilliant! Reagan tax cut chart redux from 1981. All you really need's a downward sloping line. Neesman could learn a lot from Roger Ailes.

Oh. I forgot. They're competitors now.

 

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