"Deal" Sends Stocks To Near Record Highs; Bonds Bid And USD Skids

Tyler Durden's picture

The Russell 2000 made a new all-time record high and the S&P 500 gets close as rumor turned into almost news and expectations of a done deal by 11pm tonight. The rumor was bought on the back of JPY-carry surging once again, the "news" was sold - smacking the S&P down around 8 points to VWAP, and then the ubiquitous closing ramp lifted stock back near their highs. The kicking the can left USA CDS wider on the day, put a bid under T-Bills (though the Feb Bills underperformed), lifted gold and silver off their lows, and while the USD was sent scurrying lower (after an early surge), Treasury Bonds ripped lower in yield (10Y _8bps from its highs early on). Spot VIX was crushed back below 15% (down 20% - the most in 2013) and while the rest of the VIX term structure was bid, the Feb/Mar maturities were less exuberant.


S&P is dumping after hours as soon as cash closed at its highs...


VIX fell over 20% dropping back below 15% - its biggest drop of the year...


One way street...



Equities ripped, dipped, and then ripped into the close as AUDJPY drove the car all day...


Treasuries soared when the "deal" was rumored...


Gold and Silver surrged on the "deal" news...


How markets reacted to the news...

Summed up in one chart - risk-assets in general were not buying the equity hopium again today... as cross-asset-class correlation goes negative...


T-Bills were well bid today but some context is useful for where they ended up... this is the curve today compared to the curve when the government shutdown began...


Charts: Bloomberg

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Careless Whisper's picture


The Careless Whisper Breaking News Update & Threajacking

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max2205's picture

Don't forget that E I E I O McConnell is the one to knive us 1st

MontgomeryScott's picture


Treasury Bills are now at 12 'basis points' (frigging .12 %, that's a TENTH and TWO HUNDREDTHS!) return interest on investment from ZERO.

PAPER markets seem to be temporarily boosted (like 'GLD' and 'SLV').

The SHEOPLE keep selecting Mitchy McConnell and the ilk, so HIS ass is no doubt 'making FIAT' on this 'announcment'. BONER (oops, I mean, BOEHNER) lived up to his name, once again, as well.




wee-weed up's picture



Third party is looking very appealing now... and viable.

I'm hearing that now from many who've steadfastedly refused before.

We may be hitting a tipping point.

Ham-bone's picture

the deal is congress just "temporarily" gave away it's constitutional power to the executive...now requiring a 2/3rds vote to not raise the debt ceiling.  Any bets "temporary" continues as long as the '71 Nixon "temporary" closure of the gold window?

Another death blow to the founding fathers ideas of checks and balances...

davinci7_gis's picture

17 trillion debt on 10/17 - that's no coincidence!

davinci7_gis's picture

"Buy stocks when they're high and short gold when it's low".  I asked the shoeshine boy why and he says," It's worked for me for the past 3-4 years so why change anything now?

MontgomeryScott's picture

17 trillion debt on 10/17 - that's no coincidence!

There's an acronym I learned to describe your statement. It was first heard in mirth by me several years ago, but connotes sexual acts and a request to depart your current place.



Get The Fuck Out Of Here!

According to ancient, hidden Talmudic Wiccan Fortran IV Script Texts, the date (and the 'number of the Date') '16-10-12' has a special place as well. According to legend, sixteen Senators will take ten Congressmen to the back room, and have anal sex with them for twelve hours straight.

NOTaREALmerican's picture

Re;  founding fathers ideas of checks and balances

"Da foundin fadders" couldn't compete with the joy of spending other people's money.

Spending other people's money might be better than spending free money.

adr's picture

That poor can. Someone needs to give it a break.

The term "market" is really getting insulting. You can't call this algo driven chart based farce a market. 

it aint easy's picture

Exactly, it's just squigglies on a screen at this point.

thismarketisrigged's picture

its a shame how the house has fucking conceded.


stand the fuck up to this fucking kenyan piece of shit obama and tell him to go fuck himself.


when we default, he will get all the blame, and it would be great.

davinci7_gis's picture

Unfortunately, no.  When it all craters, they will blame Dubya Bush!

MontgomeryScott's picture

WAIT for it, political man 'davinchi7'.






crakinshot's picture

FINALLY! We can finally move away from this bullshit affecting the market and go back to fundamentals; When will the fed taper ?

Mark123's picture

Zero hedge should just ignore these theatrics.  It was always just silly theater for the masses directed by the bankers.  Nothing more, nothing less.

As long as the dollar (and its proxy central bank friends the Euro, Yen, Can$, Aus$ & UK pound) holds its meagre value against key commodities, this game will just carry on.  Once the bankers get worried their ponzi is going to fail they will call all the loans and deliver us into the greatest deflationary depression this world has ever seen.

That will likely lead to war....real war.

Rainman's picture

We now return you to our regularly scheduled uninterrupted manipulations for the next 3 months...

disabledvet's picture

we already have the real war so to me this has always been and always will be about revenue production. that's a corporate function as well as a Governance function and if measured by oil and natural gas production and "truthiness" in the spending restraint department (no draft, no war) the cards have come up nothing but aces. again i'm no political expert but without the Minority Leader this deal doesn't happen and DC goes back to the "pre Civil War era" variant of politics. http://en.wikipedia.org/wiki/Charles_Sumner i had to laugh reading the Washington Post and their "total assault on the nullificationists and John C. Calhoun." http://en.wikipedia.org/wiki/John_C._Calhoun nice head of hair actually. kind of a wild look in his eyes tho. wonder where that came from. obviously the big winner is not the State but Mo Money. this was one of the essential "issues" vis a vis the Civil War and still is today. I know its crass to diminish the importance of slavery but when we weren't killing each other on a scale never before seen in human history we were chatting with each other across the front line something the "peacenik media" might want to consider when pondering the US political "landscape." ($$$$$$$$$$$$$$$$$$$$$$$$$$$$)

thismarketisrigged's picture

ebay and ibm miss big, but dont worry, that means nothing, earnings dont matter.


i mean just look at C, misses across the board yesterday, stock was flat entire day yesterday when it should have been down prob 4-5 pct, now today its up 4 -5 pct.


go figure

traderjj57's picture

is anyone surprised, could it all have been just another setup. "ya see youse guys pretend that

we got no budget see, then youuse guys over there yell and scream alot, then repeat, then buy the snot

out of it then youse first guys concede, then we make lotsa bucks"

traderjj57's picture

oh wait, you want real fundamentals like earnings and cash flow and stuff to make stocks go up,

thats sooooooooooo old schooool

Awakened Sheeple's picture


How about a bonus chart of how the most shorted stocks did today.

Scalaris's picture

I love happy endings.

q99x2's picture

When bankers and politicians get together anything is possible.

Everything is FIXED.

ebworthen's picture

And John "Lawn Chair" Boehner comes out of the committee meeting pumping his fist as if he won something...

Seasmoke's picture

Gold to the stars !!!!........