Another Dow All-Time High But Bonds/Credit/Banks Ain't Buying It

Tyler Durden's picture

Wealth levies and a European banking system collapsing; dismal capital goods new orders; a miss for new home sales and Richmond Fed; almost the lowest volume of the year in stocks, and Treasury bonds trading at their lowest yield since the Cyprus debacle started - a perfect recipe to try a run to all-time closing highs in the S&P 500. The previous high close (not intraday) was 1565.17 on 10/09/07 and we missed it by less than 2 points today. What has taken us to these new post-Cyprus highs, safety - Staples, Healthcare, and Utilities (up 1-3% since 3/15 Cyprus). Banks remain battered with C, GS, and MS all down 5-6%. Treasuries and corporate bonds reflected a considerably different perspective on risk-appetite to stocks today. While the USD largely flatlined, with JPY weakening, EURJPY (and WTI it seems) led stocks higher on dismal volume. Gold, silver, and copper flatlined (following the USD's lead) but the disconnect between VIX/Stocks and Bonds/Credit was extreme by the close. VIX remains 1.5 vols higher than it was when stocks were last here and the protection bid in credit markets (and low volume in stocks) suggests equity algos simply forgot that Europe opens again in 8 hours.

Bonds and Stocks are incredibly disconnected post Cyprus...

VIX remains well bid to where stocks are (compared to last time)...

 

Credit entirely disconnected this afternoon...

 

and market breadth was decidedly weak as we soared this afternoon...

 

'Safety' has led us higher post Cyprus...

But financials remain under pressure...

 

Gold and Silver flatlined in general but WTI surged to 5-week highs...

 

Equity markets entirely disconnected from risk-assets today as correlation disappeared in a low volume meltup range trade...

 

Charts: Bloomberg and Capital Context