FOMC Market Reaction: Equities Up, TSY Yields Up'er, Commodities Up'est

Tyler Durden's picture


S&P 500 futures were initially undecided but eventually auctioned up to the highs and pushed on past (though somewhat un-confidently). High-yield credit is bid and leading the ETFs higher. Precious metals and Oil are the winners at the moment though (beta-adjusted) with Treasury yields snapping higher and holding those yield gains. The USD is weakening led by EUR strength (as pressure reverts back to Draghi) but JPY weakness is tempering the overall USD weakness. Energy by far the outperformer post-FOMC as the rest are moving almost entirely systemically with the synthetics (though Tech is lagging). As we post, the initial exuberance is fading across most risk assets.



For now Treasury weakness, USD weakness, and Commodity strength are trumping equity's move (though HYG is most supportive in ETF land)...


Gold leading with Oil but pulling back in line with stocks for now.


EURUSD ripped-dipped-then-ripped some more...


Energy is winning for now post-FOMC


Charts: Bloomberg and Capital Context

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Wed, 12/12/2012 - 14:15 | 3056557 TruthInSunshine
TruthInSunshine's picture

More inflation = higher prices (but lower wages) = less demand = higher unemployment =


Wed, 12/12/2012 - 14:19 | 3056581 slaughterer
slaughterer's picture

ES is now in that comfortable trading zone from this summer before the announcement of QEternity.  With QEFUREVUH (got to get a NY accent in here) once Congress approves the Middle class tax extensions we should make new highs for the year.   Even Janjuaj anticipated a short-term run for ES 1500 before it all falls apart.  When it falls apart, I am sure the Tylers will be getting maximum traffic here.  

Wed, 12/12/2012 - 14:28 | 3056599 LawsofPhysics
LawsofPhysics's picture

Despite some great propaganda by the MSM, the commodity complex is under considerable stress when it comes to the actual delivery of the underlying commodities.  Yes, we'll see how long that run-up lasts as everyone starts demanding delivery to no avail.  In  the current economic paradigm, growth is still required and it ain't coming for the foreseeable future.  Better added another bar to that bar graph of "qe effectiveness".

Interesting times.

Wed, 12/12/2012 - 14:35 | 3056648 redpill
redpill's picture

They are who we thought they were.

Wed, 12/12/2012 - 14:19 | 3056584 fonzannoon
fonzannoon's picture

= Eventually more falling out of the workforce over time = lower unemployment rate = no more qe = ?

Wed, 12/12/2012 - 14:22 | 3056594 GernB
GernB's picture

More liquidity in the investment sector = more demand for investments = markets go up = the rich get richer.

More inflation + taxpayers more in debt = the poor get poorer.

Wed, 12/12/2012 - 14:41 | 3056634 TruthInSunshine
TruthInSunshine's picture


What remains of middle class and small business = will get much MOAR poor.

(However, it will, and in fact already has begun to, work its way upwards MOAR, though, so the upper middle class and upper class will get MOAR poor ultimately, also-- the snake eats its own tail)

We are in a structural economic decay whose root cause is the ultimate Ponzi that is fractional fiat full reserve finances. Neither the Bernank nor anyone else will be able to stop the UNINTENDED NOT SO BEAUTIFUL DELEVERAGING once it gets a full head of steam, bitchez.

The Fed, ECB, BOJ, BOE & PBOC can print fiat, but not wealth, productivity or demand.

Wed, 12/12/2012 - 14:44 | 3056678 GernB
GernB's picture

How many apps can I get for my OBAMAFONE.

Wed, 12/12/2012 - 14:55 | 3056718 gmrpeabody
gmrpeabody's picture

Three came with my phone....


1) change my mortgage, dude.

2) box of cheese.

3) fuck my student loan.

Wed, 12/12/2012 - 16:11 | 3057061 Atlasshruggedme
Atlasshruggedme's picture

3) does not work for me. I wish I could off load them on the tax payers (AKA = me and you) But I guess, I am to productive. I could just quit my job get stamps and forgive my loans? 

To get your loans forgiven on the new plan. A) recieve a loan after Oct 2007 and recieve a loan after Oct 2012. Yes after, I had to read the article 3 times. Your require both. - 5 years in college? Help the slackers. 

You only have to pay 10% of your income in loans, here we come Mc D's at $8 per hour. After 20 years, all if forgiven.


I am just mad...  

Wed, 12/12/2012 - 14:24 | 3056604 Caviar Emptor
Caviar Emptor's picture

You got it, Truth. Biflationary economy. After the drop in demand causes deflation will come the inevitable Moar QE and monetization to ensure that there's inflation in the mix also

Wed, 12/12/2012 - 14:35 | 3056647 LawsofPhysics
LawsofPhysics's picture

The commodity complex is at a breaking point, there is only deflation if your daily routine doesn't require any food or fuel at any input.  Wake the fuck up.  You might see demand for energy in the U.S.S.A. drop, but the BRICs are still buying and they already nationalized  most of their commodity complex. This isn't the 70's although the Federal Reserve is still a private bank.

Wed, 12/12/2012 - 14:37 | 3056625 LawsofPhysics
LawsofPhysics's picture

Correct.  This isn't the 30's or the 70's, go ahead, raise interest rates motherfuckers.  I dare you. Destroy your own balance sheet and bankrupt the U.S.S.A. (or at least make it public, we all know the western world is bankrupt).  

Wed, 12/12/2012 - 14:36 | 3056653 Alpo for Granny
Alpo for Granny's picture

Fuck it..

I triple dog dare these bitchez.

Sorry for the toilet tongue..granny had a bit too much Knob Creek in her afternoon tea. What..with the bearded man destroying everything that Earl and I have worked for wouldn't you?

Wed, 12/12/2012 - 14:42 | 3056674 azzhatter
azzhatter's picture

All I want for Xmas is Bernanke to get some horrible untreatable form of cancer, preferably ass cancer so that he dies a painful, horrible death after suffering for several months.

Wed, 12/12/2012 - 14:14 | 3056560 Flaming Ferrari
Flaming Ferrari's picture

Gold needs moar. Much moar. Clearly not impressed with this last run of the press.

Wed, 12/12/2012 - 14:20 | 3056590 The Shootist
The Shootist's picture

It is lagging very much.

Wed, 12/12/2012 - 14:33 | 3056633 Karlus
Karlus's picture

We have basically made a round trip to prices the day after Obamas election.

Im also confused why Au is not flying.

Is it because more easing is no longer effective?

Wed, 12/12/2012 - 14:37 | 3056661 Mr. Fix
Mr. Fix's picture

Gold and silver should be flying right now, this announcement is exactly what those markets have been waiting for.

 And yet, hardly anything at all.

 With the noticeable exception of Turd Fergusons metals report.

 It crashed.

 Now I'm just a homeless refugee from "Turdville".

Wed, 12/12/2012 - 14:34 | 3056645 Mr. Fix
Mr. Fix's picture

Very often, we have seen the markets react to Ben's announcements even seconds before they were made.

 Why was there a time delay today?

 Did the plunge protection team pass out at lunch?

 Did J.P. Morgan falsely at the switch?

 Was Blyth just powdering her nose?

Wed, 12/12/2012 - 14:36 | 3056566 dick cheneys ghost
dick cheneys ghost's picture

Glad I called Golman Saks and sold my gold...............not

Wed, 12/12/2012 - 14:15 | 3056568 Sutton
Sutton's picture

=More QE

Wed, 12/12/2012 - 14:17 | 3056575 Dumpster Fire
Dumpster Fire's picture

I guess its working then.

Wed, 12/12/2012 - 14:20 | 3056585 Cognitive Dissonance
Cognitive Dissonance's picture


I want moar.

Wed, 12/12/2012 - 14:24 | 3056606 slaughterer
slaughterer's picture

Pleeeze Suh, can I 'ave sum moaarrr?

Wed, 12/12/2012 - 14:30 | 3056624 TruthInSunshine
Wed, 12/12/2012 - 14:32 | 3056627 Winston Churchill
Winston Churchill's picture

Pleeeze Suh, can I 'ave sum Waaarrr ?

Made it certain did Zimbabwe Ben.

Even the Saudi's won't want no stinking dollars soon.

Wed, 12/12/2012 - 14:29 | 3056619 devo
devo's picture

Great selling opportunity.

Wed, 12/12/2012 - 14:30 | 3056623's picture

"Miracle on 20th Street" (Fed Hed's Location)....Santa Clause really is real!

Wed, 12/12/2012 - 14:30 | 3056626 Tsar Pointless
Tsar Pointless's picture

I see no reason why the S&P can't get near 1500 by year's end.

None. Mayan Apocalypse notwithstanding.

QE4EVA rulez, bitchez!

Wed, 12/12/2012 - 14:46 | 3056685 astoriajoe
astoriajoe's picture

webbot's global coast event?

Geryl's earthquakes?

Maybe those are included in the Mayan category.

Wed, 12/12/2012 - 14:30 | 3056628 Confundido
Confundido's picture

Can anyone come up with one, all I ask is one, single example in the history of inflations, where a country undergoing inflation had low unemployment? Or a country with hyperinflation and full employment? Any one? 

Wed, 12/12/2012 - 14:41 | 3056668 Seer
Seer's picture

Um... well, in one case, text-book "inflation," yes, you can have low unemployment; because, there's too much money chasing too few goods- folks producing goods then seek to ramp up production (assuming there is plenty of input materials), which requires increased hiring.

Hyperinflation, on the other hand, no, not going to find low employment (everyone's disillusioned and getting/got out of the game).

Wed, 12/12/2012 - 15:39 | 3056914 Confundido
Confundido's picture

Thanks, Seer. I meant real, not textbook examples. For centuries, men believed the sun orbited around earth too..and they even kill the guy who showed them otherwise...when in fact, someone before him had already shown it centuries before...

Wed, 12/12/2012 - 14:32 | 3056632 Mr. Fix
Mr. Fix's picture

One reaction to today, is that the TF metals report has crashed.

 With everybody waiting in such exuberant anticipation,

 now nobody can log on.

 I feel homeless.

Wed, 12/12/2012 - 14:42 | 3056673 Mr. Fix
Mr. Fix's picture

Rough crowd!

Wed, 12/12/2012 - 14:34 | 3056637 youngman
youngman's picture

I wonder what kind of party we will have when the Feds balance sheet is the same as the GDP........I predict that will be in the 12 trillion range as our economy will be tanked by then...and the Fed will be buying everything...I give it 4 years too...

Wed, 12/12/2012 - 14:35 | 3056651 TruthInSunshine
TruthInSunshine's picture

Honest question:  What's the practical difference between a 4 trillion USD or 40 trillion USD Federal Reserve Balance Sheet at this point, all things considered?

Wed, 12/12/2012 - 14:51 | 3056701 LawsofPhysics
LawsofPhysics's picture

If it were a real USD (issued by the treasury - interest free) then not much.  In this case, the owners of the underlying assets are very different.  Makes you wonder what the Federal reserve will do with all their property when it finally collapses?  This is all by design folks.

Wed, 12/12/2012 - 15:39 | 3056912 SheepDog-One
SheepDog-One's picture

Yea, whats the real 'difference' between $4 trillion or $40 trillion Clownbux and what does a timeline have anything to do with it? None of this actually 'does' anything, at all! I dont believe any of this gibberish myself, I think theyre desperate, theyre stuck and just desperate to buy a bit more time because theyre out of answers and hoping for a divine intervention or something. The maniacs have driven us up to the cliff edge and now got cold feet....thats the way I see it all anyway.

Wed, 12/12/2012 - 14:49 | 3056698 Seer
Seer's picture

It's been my wild hypothesis that the Fed is being set up (full agreement/participation) as the bag-holder.  When the bag contains all the shit the Fed will then cease.  The government will point at the Fed and say "private entity- not the govt; too bad it went bankrupt!"

When it happens pricing/valuation will be MUCH different than it is today.  Follow the true fundamentals (Food, Shelter and Water) and seek cover, else, well, buy APPL.

Four years?  With exponential functions time-frames really speed up.  I suspect that the tipping point will come before the mathematical median, that closing in on it will start to become quite apparent and that the floodgates won't hold.  I'd like for there to be more time, but I'm not counting on it...

Wed, 12/12/2012 - 14:53 | 3056714 LawsofPhysics
LawsofPhysics's picture

Why wouldn't the owners of the Fed demand and take possession of the underlying assets?  I agree the collapse is intentional, but I think your are ignoring a few hundred years of history or more.

Wed, 12/12/2012 - 15:19 | 3056835 Dr. Engali
Dr. Engali's picture

Exactly...there is a reason why they set up private central banks ,and iy's not for the benefit of the people.

Wed, 12/12/2012 - 14:37 | 3056646 otto skorzeny
otto skorzeny's picture

unusual movement in gold and silver markets today/sarc off. although buying gold at these levels bothers me when Robin Leach is doing ads for GoldMax-kind of like the Joe Kennedy/shoeshine boy/stock market story.

Wed, 12/12/2012 - 14:41 | 3056672 devo
devo's picture

I agree that the gold commercials bother me, but they bothered me in 2008, too. 

Since this is clearly end game, I ignore all comparisons to the past and all bubble cues. I also want nothing to do with the dollar so there's that.

Wed, 12/12/2012 - 17:09 | 3057268 DosZap
DosZap's picture

I agree that the gold commercials bother me, but they bothered me in 2008, too.

Since this is clearly end game, I ignore all comparisons to the past and all bubble cues. I also want nothing to do with the dollar so there's that.


Never fear, the commercials are so overworked/worn thin and it's obvious vast multitudes are not paying one iota of attention to them any longer (Joe 6 Pack) AIN'T stacking jack.

That is when WE should be concerned, when the average Joe's n Jane's are buying, they are not.Matter of fact, most have sold all of what little PM's they did own to the shyster Cash for Gold one hole we screw you at 30% below spot, and any stones in jewelry r belong to us!.(free)

We are at STILL after a 12yr run @ approx 12% return on PM's still only (private Individuals) holding 1-2% physical PM's.

Most folks have been beaten down in the cost of living expenses, not had ANY extra cash to purchase PM's at any price,not when food and energy has risen 15-50% across the borad for the neccessites of life over the past 24 mos.

All the records being set on Eagles are not from your average Joes, you have to have buckets of fiatsco's to buy any quanity of PM's at present.

Damn sure is not from Joes.

Wed, 12/12/2012 - 19:09 | 3057674 devo
devo's picture

Yeah exactly, I think when people see those commericals they say "gold is that expensive?" then go and sell what they have. lol

Wed, 12/12/2012 - 14:37 | 3056657 TrumpXVI
TrumpXVI's picture

Commodities upest?

Ummm, gold; not so much.

Get ready for the beat down.

(And I hate conspiracy theories;-/)

Wed, 12/12/2012 - 14:38 | 3056659 realtick
realtick's picture

AAPL is so done

Wed, 12/12/2012 - 14:43 | 3056669 hooligan2009
hooligan2009's picture

CNBC just released a poll that shocked their socks off. The number of sheeple is actually quite a low number.

64% of people polled gave the Fed an F and said the Fed should let the economy reset.

15% gave an A and a C.

The people know that the Fed is an agent for banks and corrupt government policies. 

Long live the people, bring back the republic and hang the banksters and politicians!

Well done to ZH. You are winning.

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