Mutual Fund Monday Streak Broken By Absence Of POMO, As SPY Volume Plunges Below Abysmal
In a surprising, and at the same time completely expected reversal, all those who thought that Monday's always close due to mutual fund inflows were stunned to see a red close. Which should not be too surprising: after all there was no POMO today - period. The only days that now have a chance of closing in the red is when the Fed is not directly involved in greasing stocks through its open market operations. Which means tomorrow should most likely end green - Tuesday and Thursday are this week's POMOs: tomorrow the Fed will buyback TIPS maturing without maturity limitation, while Thursday will see the monetization of longer-dated bonds, due 2/15/2021 – 8/15/2040. Following these two actions, the Fed will next send Amazon, Netflix and Apple to fresh quintuple digit forward PEs on October 5 and 6.
And one thing that has not changed, is that still nobody trades. NYSE volume was under 4 billion shares, which to Wall Street means just one thing: layoffs. It appears that when even the FRBNY is out, already abysmal volume gets even worse.
SPY was even worse, and at 125 million shares, this was the lowest volume day in over a month.