This Is Who Was Buying Stocks When Bond Yields Were Collapsing...

Tyler Durden's picture

The week ending May 30th was an odd week for many... US treasury bond yields were collapsing but US equity prices were soaring to ever higher higher highs on weaker and weaker data. We know institutional asset managers were net sellers during this time and we know that the indiscriminate and non-economic corporate buyback-machine was in full swing but still... who was really the bid day in day out with no sense optimal timing... Thanks to tonight's Japanese flows data, we know... Japanese investors bought the most foreign stocks in that week since 2009...



In fact, this is the most stocks that Japanese investors have bought since the week of March 6th 2009... the lows in the S&P 500... but note they were buying in this size at the top... as Lehman collapsed and all the way down...

One can't help but wonder who has the firepower to buy all the way down into the 50% collapse of US equities in 2009 and then again last week as bonds started to flash danger signals... (and note the selling in early 2013 - when the Nikkei was exploding higher relative to US)...

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Yen Cross's picture

 Are pension funds buying the top of equities, or selling yield for value?

economics9698's picture

Japanese did the same thing with real estate, buy at the top.

Say What Again's picture

I suggested this idea back on 5/30/14

We are all complainging about our Federal Reserve, but I believe the problem is much larger.  All of the major Central Banks are printing at an ever increasing rate -- And they can print for a very long time before TSHTF!

Don't you wish you rode the SPY, QQQ, IWM wave for the last 5 years...  Never mind - don't answer that question.

disabledvet's picture

GREAT question...and leaving aside the fact that their is no way of knowing this...generally speaking "pension funds run on auto pilot."

The sell off in small caps is very problematic to me because that's an inflation hedge being taken to the woodshed.

"I smell a rat" here as the "trenders" simply hyperinflate the economy to protect their "sacred cows" (mega cap growth.)

High beta has been utterly annihilated YTD...although some of those names have staged an impressive recovery too (Tesla being one of the best.)

Sorry but General Motors really looks bad to me do many other "incumbents" who simply have too much debt to compete with the New Kids in town. (Amazon, Google, Apple, etc)

I still think this next collapse will start in the junk bond markets as the Fed barely had to do anything to blow up that space last year.

Inflation matters...but that's the numerator to the economy's denominator.

A collapse in earnings will hit much faster than the money printers can "conjure" growth.

The scary thought is that earnings collapse "just in time for fuel costs to soar." Europe is paying ten bucks or so a gallon for fuel...don't know why the USA feels it's so special.

Spungo's picture

This is what happens when the media and the government lie about there being a recovery. Without boots on the ground, how are the Japanese supposed to know our economy is a disaster? It's bad enough Obama wants to victimize American investors. Now he has Japanese investor blood on his hands.

fonzannoon's picture

The 10yr jgb is .59bps. this ain't about a recovery. it's about yield.

Yen Cross's picture

  My best to you Fonz. The Fed can "never" take the path of Japan. No-one in their right mind would buy t-10's at 56 basis points.

  Here's my likely scenario Fonz.

The usd tanks over the next several months. (things slow down after q-2 reporting)

fonzannoon's picture

I'm with ya man. I just mean the low yields over in Japan are forcing Japanes investors to buy over here. SPY at a 2% yield with the bernakyellen behind it. 

I honestly have no idea where we go from here. I just know I will be buying it the whole way and not selling and practicing my best stupid ignorant face for when time comes.

Dr. Engali's picture

Just think of how much they can lever up to buy equities and raise the world debt levels if the U.S becomes the next carry trade.

Yen Cross's picture

 Hey Doc.  Reserve currencies have their 'setbacks'  How do importers and exporters hedge their "repatriated" profits?

BringOnTheAsteroid's picture

There might be a market for a translation of ZH into Japanese. 

Wild Theories's picture

Nope, ZH will get shunned in Japan on 2 offences: rampant swearing and anti-Americanism.

Japanese don't like to be rude, and they also hold the US in high regard.

BrosephStiglitz's picture

They hold them in high regard for now.  Once the markets crash and their wealth is erased they will convert their industry to produce kamikaze drones.

Dr. Venkman's picture

Looks like the tried and true buy high and sell low strategy.

fonzannoon's picture


Seems like there will always be a buyer, whether it is institutional, retail, or soveriegns etc etc. 

BringOnTheAsteroid's picture

Are you classifying the Fed as institutional?

fonzannoon's picture

I wish they were institutionalized. 

Hey OT since this will prob be a boring night. Did Tyler or that Mike Kreiger guy post this yet? Decent rant, pretty funny.

Dr. Engali's picture

Well they certainly should be institutionalized.

Yen Cross's picture

  hERE'S THE "NUTS AND BOLTS"  over the 1st half of June. 

  Risk is already priced in.

 in August the risk premium will rise in front of M/T elections. I've deeply evaluated PPI and CPI through (forward) shipping channels.

maskone909's picture

Risk is priced in when the fed is the market? Oxymoron if i might say so

Dr. Engali's picture

So tiny little Belgium is buying our bonds and broke ass Japan is buying our equities. Nothing suspicious here. MyRa anybody?

disabledvet's picture

You have to factor in a worthless dollar.

Sure...the counter cyclical policy "was on steroids" (2008) and had the "desired effect." (Huge double top in gold, massive rally in equities, even more massive rally in fixed income...but ZERO recovery)

So entire municipalities start popping off like they were Government run Ponzi schemes.

Sorry but you want to bail on Big City Slick here as the federal outlay vis a vis the collapse has been truly epic. (Google "Silver Line" if you're interested. More than enough to take out the Postal Service.)

Moonshoting prices only makes The Collapse Part Deaux that much worse. Municipal Governments had better get in the game of providing dirt cheap internet access. That's been the prime form of communication now going on thirty years.

Of course you can give all the money to Google them drive the price down to less than a PO box...for a year....and that will be that.

Yen Cross's picture

 The Belgium connection is exposed Doc.

 Released killers, demographic, geographic/

NAP's picture

Japanese investors or central bank?

slingshot's picture

yea its those japanese housewifes buying  25k-65k blocks of ES at the close and  pushing the market up...  

RiverRoad's picture

When the Emperor has no clothes even the cleanest dirty shirt looks good.

Yen Cross's picture

   He/She is running behind a "cloven driven" wagon looking for sanctuary.

buzzsaw99's picture

my guess is that margin borrowing is fueling the nikkei and the nyse

zirp 4 evah bitchez

Herdee's picture

The start of big flows out of Japan instead of them buying Government debt?Could be a signal.Maybe the smart players see danger and are playing it safe in foreign assets like U.S. stocks.Kyle Bass described this some time ago that it would be an indication of trouble.Time to buy GYEN?( Long Gold - Short Yen) or Gold in YEN terms?

WMM II's picture

makes perfect sense.

print phunny money.

buy foriegn companies.

'silly' japanese.

buy bonds at the same time.

why not.

after all.

just print more.



Yen Cross's picture

 I've tried to have fun and be med-evil. The simple fact is that we're looking at "over-supply".

  The ports and oil terminals are plugged. That's a fact/  Why?

Wild Theories's picture

Thank you, Tylers, I always suspected the Japanese were coming in.

The only people more willing to drink the kool-aid of US omnipotence than Americans themselves.

syntaxterror's picture

As long as there's a Bigger Fool to keep buying, it's all good.

AGoldhamster's picture

BBs in the weekly predict A HUGE move just around the corner in USDJPY.

PS: Cycle wise it seems US equities could be in for a sideways period or a smooth correction into July and maybe even August. Again what will that do to rates and USDJPY?


Dollar Bill Hiccup's picture

Big surprise. Japanese "investors" they say. Just look at the defense of a breakdwon in Nikkei, it's all clear.