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Trannies & MoMos Tumble But Dow Diverges To New Record High
On a below average volume day, there were three intriguing divergences across asset classes today. Thanks to CVX (and a few others including MSFT) the megacaps of the Dow Industrials lurched to new record highs as the Transports dropped their most in a month and the momo names (led by TSLA) took high-beta NDX and RUT down on the day. Another divergence was oil (which surged notably) and copper (which was pummeled) as gold and silver limped higher (on weaker USD ahead of tomorrow's rumored 'no cut' ECB meeting). The last notable divergence was in the Treasury complex where the long-bond continues to push higher in yield while 'forward-guidance' belief is dragging the front-end lower in yield (5s30s now 10bps steeper on the week).
Dow Industrials hold most of their gains to close at new record highs... but Trannies (worst day in a month) and Nasdaq (TSLA) stumbled... chatter is that the big tech momos were sold to make room for TWTR - not so sure...
In Treasury land, the curve is steepening rather notably since Goldman's Taper/forward-guidance/threshold-adjustment note...
In commodities, the divergence between copper (ungrowth) and oil (growth/flation) was notable - as gold/silver limped higher...
The short squeeze of the "most shorted" names into last night's TSLA earninsg appears to have imploded and today saw "most shorted" names dropped the most in a month...
Note - only 1 of 16 IPOs rose on the day today...
Charts: Bloomberg
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Is it finally safe to keep the Dow 15,000 hat out of storage now that there are no companies in that prestigious group of 30 that actually make anything?
I bought Nov 22 DIA puts near the highs of the day.
Not recommending...SLB (Schlumberge) but these drillers keep drilling. Imagine that. "In an age of trillions they fight for mere millions." In any case the oddity of treasuries and equities rising together has been duly noted in these here parts and of course "mere hiccup" in the equity space after treasuries got obliterated this summer. So sure...why not Solazyme right? In any case the retail flows are setting up perfect here. Apple selling at 5 times earnings absolutely says "buy Sony and short Microsoft." I'm still not on Becky Quick's Crackberry list...but I'd like to be. Sorry but the nerds seem sufficiently revenged at this point...so I think I'll just give a toast to Amazing Mr Market and leave it at that. It's sixty degrees here when it should be twenty below zero. Whoever gave us global warming...I thank you! I here the snow is falling hard in Turkey too so "no water shortage to go with that ten million barrels of oil a day they're about to start producing." I look forward to hitting the slopes out that way some day...try some goat cheese, hit a day at the Roman bath with the honey or something. Ponder "the Eastern Days." Crazy world we live in. So many things you never see. coming...so many you do. Cue the broadcast...we're going live on this one.
IPO mania is back. Any IPO, top dollar offered.
C'monnnn thirty-six grand!
Daddy needs a new pair of shoes!
Metallica-Enter Sandman (Smooth Jazz Version)
http://www.youtube.com/watch?v=OBmM79YadYM (4:05)
You do not stop predicting us the end of the world and the end of markets for 5 years. What we see? The market is extraordinary and f*****g losers as you one missed the train. You are hopeless.
Wow such a crony game! The divergence between copper and oil says it all. but it looks like profit taking to end year rally.
But Obama's gift to Wall Street was Blackstone's 7billion$ buy up of foreclosed homes, tasty, that and they are now trading rental bonds on the secondary market. Yes, rental bonds!
Over to you Yelland, BoJ is nearly all in, I know you want to suppress the short end i.e buy the whole thing up through some sleight of hand trade.
lol
Fly the BTFATH banner with pride, America!
http://www.safehaven.com/article/31717/the-ecbs-tough-balancing-act-bubbles-vs-deflation
Today, a small group of central bank chiefs can meet in private and wield unprecedented power over global markets, economies, and wealth distribution. They are held accountable to the ruling politicians that in most cases have no respect for the principle of sound money. Instead, in Europe, the UK, Japan, the US, and elsewhere, central bankers have become intricately linked to monetizing government debts, and financing the expansion of the welfare state. As such, disciplined and independent central banking, a cornerstone to any hope for sound money and credit, has been relegated to the dustbin of history.
Central banking, - ostensibly designed to combat high levels of inflation and promote economic growth, while overseeing the stability of the banking industry, has instead, morphed into technocratic planning boards that are constantly involved in rigging the value of the financial markets. Their principal modus of operandi is to encourage risk taking in the local stock markets, through massive injections of ultra-cheap liquidity. However, the result isn't better economic conditions, but rather the expansion of massive bubbles in various financial markets. In turn, central bankers have widened the wealth gap between the owners of equities, and the rest of the struggling population whose wages are sliding backwards, and is increasingly seeking out assistance through welfare programs.
Historically, the value of the stock market reflected the dynamics of the local economy, and would influence the social mood of the populace. A stock market that is booming would signal an up-and-coming economy that would be followed by increased business investment and the creation of good paying jobs. Rising share prices boost the fortunes of about 10% of households in the country, and triggers a greater propensity to spend for goods and services - otherwise known as the "trickle down" effect. Therefore, keeping a constant vigil on the behavior of the stock market, - has become the raison d'être of central banks.
In earlier times, stocks traded on the local stock exchange used to track or even anticipate the nation's business cycle. But that reliable role as a leading indicator began to seriously break down after the financial crisis of 2008. Since then, because of the hallucinogenic effects of "quantitative easing" (QE), - stock markets are no longer reflections of the health of the local economies or forecasting mechanisms of the business cycles. Instead, they are just slices of ownership in specific companies that are unreliable gauges of anything but the underlying strength of the companies they represent, their dividend payments and buybacks, and the schizophrenic mind-set of the traders who buy and sell the shares.