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Bonds & Stocks Surge As Copper & Crude Crushed

Tyler Durden's picture




 

Overnight weakness in Japan and Europe was no big catalysts for markets either way, but the moment Vladimir Putin uttered the words "avoid conflict" (as ooposed to saying 'destroy all of you'?), stocks took off. Weak jobless claims data sparked a dump but once cash markets opened, it was on like donkey kong as the worst volume day of a terrible volume week took stocks higher on the back of USDJPY. For the technically-minded, the S&P is testing up to its 50-day moving-average (DMA), Russell finding resistance at 100/200DMA, Trannies broke back above the 50DMA, and Nasdaq is on course for new highs. All this exuberance in stocks was shared by bonds as buyers bid 30Y yields to a 3.18% handle - lowest in 15 months (gaping divergence to stocks this week). USD oscillated but ended unch. Gold and silver limped higher as copper and crude were monkey-hammered. VIX ended at 3-week lows (after an opening slam lower) for day 15 of inversion. S&P futures volume 55% below average.

 

Putin started it today...

 

Lifting stocks to new highs on the week...

 

Thanks to USDJPY... (though into the close things started to break)...

 

VIX was slammed lower at the open but diverged slightly for rest of the day...then melted up into the close...

 

As bonds and stocks continue to diverge from retail sales...

 

Treasury yields were slammed (and heavby auction demasnd) sending 30Y bond yields to fresh 15-month lows...

 

FX markets were noisy once again around geopolitics and US macro but USD ended unch on the day...

 

Gold and silver limped higher but as US data hit Crude and copper were whacked lower...

 

Gold had quite a volatile day...

 

Brent and WTI fell generally in line as the spread stayeds steady around $6.50

 

Charts: Bloomberg

Bonus Chart: Was everyone expecting the short squeeze follow-through?

 

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Thu, 08/14/2014 - 16:09 | 5093936 fonzannoon
fonzannoon's picture

JCP just proved that retail sales was meaningless. They only lost 75 cents. Good for a 10% AH pop on top of an intra day 4% pop.

na na nana

 - Janet

Thu, 08/14/2014 - 16:17 | 5093982 techstrategy
techstrategy's picture

Will fail catastrophically as volume hits zero.  My favorite float scam (option driven predatory trading racket) NFLX has gone from a few million shares per day to under a million...  It's going to end very badly, with people in jail (if they make it there, which I'll do my best to help ensure).

Thu, 08/14/2014 - 16:13 | 5093959 techstrategy
techstrategy's picture

Crude equals Russia.  Copper equals China.  Might as well direct the rigged markets to policy objectives.  Raise physical cash and buy physical gold.  Sell all positions in float scams (growth cartel stocks) that have not been subject to any price discovery for years as they will get completely crushed when then volume returns.

Thu, 08/14/2014 - 16:36 | 5094105 DoChenRollingBearing
DoChenRollingBearing's picture

Interesting comments on crude and copper, thank you.

Raised some CA$H today, will buy moar Au very soon.

Thu, 08/14/2014 - 16:14 | 5093960 debtor of last ...
debtor of last resort's picture

And Russian oli's made a few bucks on Putin's avoid conflict remarks. Same old, same.

Thu, 08/14/2014 - 16:16 | 5093969 IronShield
IronShield's picture

So you want to price your crude in another currency eh?  Well have at it sum-bitch.  Until everyone agrees with you we will just undercut your dumb ass.

Of course, those that do price their oil in dollars are now saying, WTF?  ;-)

Thu, 08/14/2014 - 16:17 | 5093977 huggy_in_london
huggy_in_london's picture

If Putin says "avoid conflict" you can bet the bank he will be heading for conflict.  how stupid can these people in the market be? (very stupid it seems)

Thu, 08/14/2014 - 16:20 | 5093996 GooseShtepping Moron
GooseShtepping Moron's picture

With Germany in contraction and US retail getting killed, it's no wonder commodities are slumping. The physical assets read deflation in the winds, while stocks are betting on the Fed keeping rates low. They both see the same bad news, but for those in the inflationary game bad news is good news.

However, in a war between inflation and deflation, deflation always wins in the end. Say's Law is ineluctable. The lack of real wealth to trade with trumps the power of the printing press.

Thu, 08/14/2014 - 16:35 | 5094098 kaiserhoff
kaiserhoff's picture

Interesting take on Say's Law.  In it's simplest form, it's just a theory that production creates its own demand.

Might want to ask the auto companies about that, or maybe the boys and girls in commercial real estate.

Thu, 08/14/2014 - 16:53 | 5094179 GooseShtepping Moron
GooseShtepping Moron's picture

That's why you have to be careful how you state it. Say's Law does not mean that more production of X automatically creates more demand for X. It means that production of X creates demand for the factors X is produced with, which have to be produced and paid for somehow. This reduces to paying for production with production. There cannot be a general glut because an economy will always produce enough wealth to purchase its own output. Obviously this does not mean it isn't possible to overproduce a certain good and drive the price of it into the basement. Speculative asset bubbles do that very thing, but that doesn't obviate the need to pay for production with other production. It is precisely for this reason that speculative bubbles do long-range, nonlinear damage to the larger economy.

Thu, 08/14/2014 - 16:24 | 5094034 Bossman1967
Bossman1967's picture

updated news JC Penny surges due to not loosing so much what the fuck is that. shit getting ready to hit the fan. that's so funny. let me buy som jcp stock maybe I wont loose

Thu, 08/14/2014 - 16:37 | 5094068 Squid Viscous
Squid Viscous's picture

the verb is L-O-S-E... present participle L-O-S-I-N-G

but you're right what a fucking joke/squeeze...of a joke stock

Thu, 08/14/2014 - 16:25 | 5094044 Callz d Ballz
Callz d Ballz's picture

Nice levitation on crumbs.

Thu, 08/14/2014 - 16:26 | 5094047 smcapmachine
smcapmachine's picture

"Zerohedge just filed BK." -CNN

Thu, 08/14/2014 - 16:27 | 5094052 Rainman
Rainman's picture

hmm... so we gets a flight to safety and risk simultaneously.....  perfectly abnormally normal for these schizo times.

Thu, 08/14/2014 - 16:54 | 5094187 NDXTrader
NDXTrader's picture

This week was all about options expiring tomorrow - hence the spike upward on nothing but bad news. Put buyers get crushed, everyone too scared/concerned to buy calls. I haven't said it in 5 years, but I really do think this week is the intermediate top until the Fed decides to ramp up QE again

Fri, 08/15/2014 - 03:08 | 5096289 Jano
Jano's picture

Mr. Putin is bearish. He is the assistant to Yelen: he helps her to pop the bubble.
Should he really say: I bomb you? Would the stocks then go other way?

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