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    05/26/2016 - 05:58
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The Market Reacts To (Then Reads) Janet Yellen's Speech

Tyler Durden's picture


Out of the gate - based on the fact the word "slack" was present and the word "bubble" was not, stocks ramped higher as J-Yell's J-Hole speech hit. Bond yields surged (led by 5Y) and the USDollar also surged (as gold shrugged). However, once the machines were done, humans reacted to the fact that this was not the "full dovish" speech that was 'priced in' and have started to sell stocks back... but then again - we always have Draghi later to save Friday...


Just asa we warned... JPY 104 was hit and that sparked the momo run in the S&P - but it seems there were fewer stops to run than machines hoped...


Uh Oh!!!


Stocks pump and dump.. and then high beta levitates...


Then gives it back...


as bond yields surge along with the USD...


Bonds having an ugly week - especially the short-end...


Credit is less exuberant...


And some initial comments from Reuters:


Federal Reserve's Janet Yellen speech "reinforces two messages that were signaled in Wednesday's FOMC minutes: first, a less dovish tilt overall in the thinking of Fed officials. And second, significant differences in their thinking when it comes to the details of when and how high to hike interest rates."


"I think everyone knows Yellen is a dove, and that she would rather err on the side of caution. I agree with her. Investors are really in a sweet spot, the economy is improving and central banks are not going to let the global economy fall into another recession. Yellen is going to lead the way on that.

"There aren't any surprises, so the market activity is very normal. We may consolidate a little, since we got a little overbought, but any pullback would be a buying opportunity. People on the sidelines are missing out on a great bull market. We could hit 2,000 on the S&P at any minute, but my sights are much higher than that. It would take a huge event to derail this rally."

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Fri, 08/22/2014 - 10:34 | 5129608 himaroid
himaroid's picture

You know we are in trouble when these fokkers are that easy to figure out. Cornered animals are vicious.

Fri, 08/22/2014 - 10:41 | 5129641 Aknownymouse
Aknownymouse's picture

Isn't it clear by now that the Central Bankers REALLY have no idea what to do? When is the emperor has no clothes moment? Today???

Fri, 08/22/2014 - 11:07 | 5129655 AllThatGlitters
AllThatGlitters's picture

Gold getting whacked: http://www.pmbull.com/gold-price/

Watch for it to reverse later today.

Silver getting whacked even more: http://www.pmbull.com/silver-price/

Haven't seen a "Gold Bitches!" in awhile.  Is that a contrarian signal that it's time to buy?

Fri, 08/22/2014 - 11:08 | 5129735 LawsofPhysics
LawsofPhysics's picture

Sales are good, don't knock it.

Fri, 08/22/2014 - 13:04 | 5130267 Al Huxley
Al Huxley's picture

I wouldn't bet on gold going up this close to the end of the Comex month.  Maybe next week, after the 27th. 

Fri, 08/22/2014 - 13:32 | 5130419 Aaaarghh
Aaaarghh's picture

oh my lord, the CB's know exactly what they are doing, it's all going to plan and when the opportune moment arrives, everyone will get screwed.

Fri, 08/22/2014 - 11:09 | 5129740 El Vaquero
El Vaquero's picture

They must raise rates and taper, but at the same time, if they do, they will break our economy.  The only thing that they can do is try to keep it going as long as possible.  At this point, it doesn't matter if they know what they are doing or if they are clueless.

Fri, 08/22/2014 - 14:41 | 5130791 KnuckleDragger-X
KnuckleDragger-X's picture

Daned if you do and damned if you don't, pick the worst case and the FED will shoot for it.

Fri, 08/22/2014 - 10:36 | 5129613 fonzannoon
fonzannoon's picture

The fed is going to raise rates because the economy has finally heated up. We are back to full employment and wage growth is starting to come around while inflation stays low. The fed will begin to set in place a series of rate hikes and savers will finally be rewarded. The only thing that could throw the fed off this path is the already coordinated late september terrorist attack that our leaders have telegraphed. But that attack is justifiable and necessary to blow out the deficits again.

Fri, 08/22/2014 - 10:38 | 5129626 Dr. Engali
Dr. Engali's picture

If I didn't know any better, I'd swear that that you and MDB were conjoined twins.

Fri, 08/22/2014 - 10:42 | 5129643 Bunghole
Bunghole's picture

You nailed it Doc.

Fonz woke up full of snark today.

Fri, 08/22/2014 - 10:37 | 5129628 himaroid
himaroid's picture

Just in time for elections.

Fri, 08/22/2014 - 10:51 | 5129671 lester1
lester1's picture

Are you being sarcastic dude??

Ask anyone on the street if the economy is better and they will tell you NO !!

Fri, 08/22/2014 - 11:04 | 5129717 Dr. Engali
Dr. Engali's picture

The Fonz sarcastic? No f---ing way. The dude is always way serious.

Fri, 08/22/2014 - 11:11 | 5129748 El Vaquero
El Vaquero's picture

Totally serious. 


Now, where's my ham sandwich?

Fri, 08/22/2014 - 10:54 | 5129680 venturen
venturen's picture

"savers will finally be rewarded"   FLOL

Cronies are rewarded.  The next generation(unless the child of .0001%er) are doomed. How you going to afford that $2 Million fixer upper as IPO fraud and $10 Trillion deficit spend are over. Long slide from here!

Fri, 08/22/2014 - 11:27 | 5129826 intotheblack
intotheblack's picture

Full employment? Low inflation? WTF?

Fri, 08/22/2014 - 12:30 | 5130072 novictim
novictim's picture

You must be trying out for a role in the Broadway Musical, Animal Farm.  So read the sign on the other barn door:

" 'Full Employment' " occurs only when the unemploytment rate hits 3-3.5%."

We've known this for three decades or more.  How old are you?

Fri, 08/22/2014 - 13:25 | 5130380 starman
starman's picture

Hahaha funny man you're Fonz good joke "economy is back" very funny.



Fri, 08/22/2014 - 14:49 | 5130874 Hohum
Hohum's picture


Did you add an extra "n" in the middle?

Fri, 08/22/2014 - 10:40 | 5129632 Dr. Engali
Dr. Engali's picture

Aaaaannnnddddd....... we're back to green..... now red.... green again.... wait... wait.... red.

Fri, 08/22/2014 - 10:38 | 5129635 ebworthen
ebworthen's picture

Wayne Kaufman:  "Investors are really in a sweet spot, the economy is improving and central banks are not going to let the global economy fall into another recession."

Wow, talk about talking your book - that takes the cake.

Fri, 08/22/2014 - 10:47 | 5129656 101 years and c...
101 years and counting's picture

recessions are terrorists and should be treated as such.  talk about a pile of BS.  so, in theory, there will never be another recession?

Fri, 08/22/2014 - 11:13 | 5129768 El Vaquero
El Vaquero's picture

Lets look at a bit more of that quote:


"There aren't any surprises, so the market activity is very normal. We may consolidate a little, since we got a little overbought, but any pullback would be a buying opportunity. People on the sidelines are missing out on a great bull market.

In other words, any slight correction is not really a correction, even though we're calling it overbought, and BTFD, BTATFH, BTFWTF, BTFU, motherfuckers!


It'll be fun to hear the whining the first time those memes truly breakdown.

Fri, 08/22/2014 - 11:21 | 5129800 Chupacabra-322
Chupacabra-322's picture

At this point who really gives a Fuck? How many countless articles have the Tyler's posted here about the whole market being fixed & one huge Ponzi.

"Wars over man Wermer dropped the big one"

Fri, 08/22/2014 - 11:22 | 5129805 BeerMe
BeerMe's picture

Inflationary bull market that isn't worth shit.

Fri, 08/22/2014 - 10:45 | 5129636 Mercury
Mercury's picture

Out of the gate - based on the fact the word "slack" was present and the word "bubble" was not, stocks ramped higher as J-Yell's J-Hole speech hit.

It's a shame we never got to witness Mickey Mantle on steroids or Alan Greenspan's obfuscating verbosity in the age of headline-reading algos.

Related:   https://www.youtube.com/watch?v=SnxNnJYziMY

Fri, 08/22/2014 - 10:42 | 5129646 taketheredpill
taketheredpill's picture




October can't come soon enough for me.

Fri, 08/22/2014 - 10:52 | 5129675 TabakLover
TabakLover's picture

If Yellen's goal was for the markets to not react violently, but stay flat to slightly up, after her speech.....looks gets a cigar.

Fri, 08/22/2014 - 10:53 | 5129677 Quinvarius
Quinvarius's picture

This market is about to tank.  Just like it always tanks after a Yellen speech.

Fri, 08/22/2014 - 10:56 | 5129689 saltedGold
saltedGold's picture

Maybe if she wasn't Yellen, more people would listen..... 

Fri, 08/22/2014 - 10:58 | 5129697 Quinvarius
Quinvarius's picture

I started reading the text if her speech.  My mind kept imagining it in her voice.  It was horrible.  I had pity for anyone who had to listen to that.  It was a long read.

Fri, 08/22/2014 - 11:05 | 5129719 Forked Tongue Fella
Forked Tongue Fella's picture


Woman who squawks with tongue like fork is not liked by the fellas



Fri, 08/22/2014 - 12:44 | 5130154 novictim
novictim's picture

The real truth is that the 1% are being eaten by the 0.1% who are being eaten by the 0.01% who are being eaten by the 0.001% who are being eaten by the ...

Let me remind everyone that the accepted natural rate of unemployment is 3-3.5%

That means that for any 100 workers in the economy, three or four of them will be taking time off from work for all the normal reasons one can imagine other than that they cannot find a job.

It amazes me that we are so easily manipulated into thinking that 6-7% unemployment is normal.  Scary.

Fri, 08/22/2014 - 12:52 | 5130188 adr
adr's picture

Retail buyers are telegraphing a terrible year for 2015. Of course not openly, but when booking orders don't show up you know they have no clue about the following year and don't care to make a guess.

I've heard from just about everyone that major booking orders for 2015 are way late. My own company should have booked over $15 million by now, we've only booked $5 million. Booking orders are also the only way banks will loan money, if they don't see the orders booked, they won't lend. At least to small companies. My company has been told numerous times by banks that we are too small to loan money to. But a near bankrupt fortune 500 company with billions in debt is safe.

The economy is dead outside the areas where credit is flowing, cars and student loans.

This bullshit won't end until the Streeters are dead or broke.

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