What Sent Stocks Soaring Overnight: DB's Jim Reid Explains

Tyler Durden's picture

Earlier today we showed the three key headlines that summarized today's euphoric mood, and explain the general liftathon among massively oversold risk assets:

  • Stocks Rebound on Stimulus Speculation
  • Oil Rallies in Biggest 2-Day Surge Since August on Stimulus Bets
  • Yen Investors Homeward Bound as BOJ Stimulus Seen Boosting Bonds

And now,  here is DB's Jim Reid putting it all together, and explaining that whatever it was that sent global equity markets to all time highs despite global economic slowdown as recently as last summer, is once again back front and center:

From Deutsche Bank's Jim Reid:

Yesterday the folks on Bloomberg TV finally had something to get excited about with the ECB meeting even if many will end up being once bitten twice shy this time round.

Indeed the last time the market flirted with Mr Draghi's seductive sound bites it eventually got jilted at the easing aisle. However there was a hint of giving him a second chance yesterday with a fairly positive market reaction to pretty firm signaling that the ECB will ease again in March.

Although the meeting is 7 weeks away could yesterday mark the start of another plate spinning cycle from the central banks?

The market chatter is now looking towards Kuroda to signal more action when the BoJ meet this time next week. Will Yellen also signal a more cautious and dovish stance at the FOMC next Wednesday?

We continue to think central bank money printing globally remains in the early stages. Such policies could go on for several years yet even if there are periodic pauses.

Ultimately we continue to think monetary policy will finance fiscal spending but that will take a recession to focus policy makers’ minds.

For now with inflation so low it would be strange if central banks didn't do more in the face of such market turmoil, low inflation and elevated risk factors. It won't be a major growth stimulant but any extra liquidity provided will have to go somewhere so it's too early to say the central bank era of elevating asset prices is over even if it's becoming more difficult to get the same response.

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stocktivity's picture

BTFDers who buy the fucking dip today may have their heads handed to them as soon as by the close 4 pm.

mandalou's picture

Nah, they will do well today and for a little longer. I will gladly eat crow if I am wrong as I want to see a big correction myself.

philipat's picture

So let me see if I understand correctly? After all the experiences of the last 8 years, the "Markets" still believe that the way to economic growth and prosperity is Central Banks printing Unicorn money?

Excuse my ignorance but this reminds me of Einstein's definition of insanity....

Arnold's picture

Must be some hot IPO s ready to unfold.

Stainless Steel Rat's picture
Stainless Steel Rat (not verified) Arnold Jan 22, 2016 9:53 AM

Nothing like a 1AM soundbite from an ex Goldman Sachs whore to fuck your day.

ArkansasAngie's picture

It isn't a bet that the CB's are doing the right thing.  It's a bet that they will continuing doing it regardless of its value.  It is a focus on the means ... not the end.  Arbitriage to the moon baby!

Algo's have no morality.  They don't care about the real economy.  

yogibear's picture

"After all the experiences of the last 8 years, the "Markets" still believe that the way to economic growth and prosperity is Central Banks printing Unicorn money?"

Correct. QE, flooding Wall Street with cheap money is one tried and true policy that keeps the stock mkt bubble inflated. They  can't bear much more market downside so they will QE until the currency gets killed.

philipat's picture

Whilst keeping their foot on the throat of PM's? Which kind of proves my point?

That is, of course, assuming that the 99% will ever wake up..

sun tzu's picture

If the system falls apart they will lose their power and wealth. The Nazis knew they would lose the war in 1944 but kept fighting until the end. They knew that losing meant the gallows or prison. Keep the ponzi going as long as possible.

jtmo3's picture

No. They're not stupid. They know what's up. What options are left to them? Do they fold their hands and watch their make believe world crumble or print and make a shitload more money and power for themselves and their "friends"? It really boils down to that. They basically control the world since they control the money. Would you give that up without a fight?

philipat's picture

No, especially in view of a largely ignorant population. But here at ZH, we do have a more informed audience?

Galactic Superwave's picture

Psychopathy is a form of insanity. Volatility is a good way to enrich the primary players in the markets, many of which are psychopaths.

VinceFostersGhost's picture



DB's Jim Reid Explains


Screw him.....what does Nadler think?

nink's picture

An algo discovered if you pump oil S&P Dow and Nasdaq will follow

Winston Churchill's picture

Junkie looking for another fix.

Should end well trusting him.

new game's picture

the human experience, ahhhh, soon good, let it in. now i can live again, damned reality fucking up my rainbow surfing life, ha...

Crisismode's picture



So, whatever happened to our dear Jonny-boy?


Haven't heard a peep out of him in a long long time.

Kirk2NCC1701's picture

Not all 'corrections' are natural.  These days they are more likely to be artificial, i.e. Centrally Coordinated by TPTB.

If you're old school, you'll want a natural correction. If not, you won't care as long as you profit. Which are you? 

p.s. Once again I notice that tons of hacks up vote you, w/o really thinking through your response.  It is also quite possible that they don't care about our Central Planners, as long as they benefit themselves.

Vinividivinci's picture

serves them right for trying to catch a falling knife.

skepsis101's picture

Fascinating to watch mass-addiction.  When the party ends with egotists living under bridges I won't giving any handouts.

Baby Eating Dingo22's picture

Unlike traders, those microwave dishes could have some issues with the other white stuff later in the day

Wannabe_Oracle's picture

They will fall, eventually, but likely not by days end.

max2205's picture

Print to fund govt?

No value meet no value 

new game's picture

moar like, print to retain power...

JDFX's picture

Overnight ?  It's nothing more sophisticated than stealing money !  

Pareto's picture

What was in  this article that we - for sure - didn't already know?

Racer's picture

If all the "market" goes up on is more hot air and waffle after years of relying on that only = tulipmania on steroids

khnum's picture

So what are we forfeiting now for numbers on a fucking board a cure for cancer or alsheimers,new national infrastructure,a viable space programme,immortality or extreme longevity,solving homelessness and unemployment,the opportunity cost is the cost of that forgone we are blowing our future on a mob of fucking criminals.

new game's picture

no cures needed, they have drugs to sell...

BeerMe's picture

Don't forget the "cure" organizations that make billions upon billions not finding a cure.

hendrik1730's picture

The longer the central banks keep inflating the bubble and the bigger they make it the louder the implosion will be.

khnum's picture

...or the banks keep all the money and the economy starves due to no credit is more likely

adr's picture

What made markets go up?

Draghi getting a silver dildo shoved up his ass.

We need to kill these fuckers, now.

I can't wait to see gas jump $.20 today even though it is still selling where it was when oil was $65.

Everyone at Davos needs to be killed. It should be the #1 goal of everyone else on the planet.

the not so mighty maximiza's picture

So without stimulus it really is a shit show

Dr. Engali's picture

Yeah, good luck with the dead cat bounce. Janet's says no more cookies for you bitchez, time to eat your peas!

JohnGaltsChild's picture

Yippy!!!! It's ground hog day!!!

VinceFostersGhost's picture



Yeah.....going on 50 days.....maybe I'm doing something wrong here.


Maybe I should take piano lessons.

Arnold's picture

You'll never regret your time spent on accordion lessons.



John Adams's picture

GREED IS GOOD! - Gordon Gecko


ajkreider's picture

Or, it coud be that earnings have been pretty good so far.

Kefeer's picture

You left out, based on "lowered expectations".

Dr. Engali's picture

First laugh of the day. You almost made me sip coffee on my screen.

herkomilchen's picture

So markets rose on an outburst of hope and prayer.  Sounds solid and lasting.

Kefeer's picture

The problem is that this is very different.  AT the same time, there could be a "pause" with some upward momentum, but how far can they levitate?  Each new high is a lower than the previous...seems like an intentional landing and only the Banksters and God know what is happening behind the scenes that is illegal; especially in the oil derivative patch.


Remember the next time the market crashes; it will really crash into pieces and until TPTB are ready for that; it won't happen unless different "Powers' take the control levers.


Banker solution; continue on the same path.

Arnold's picture

The problem is that they are using my money buying slow performing assets in a declining economy.

PPT can buy and hold, and sell the rally.

Maybe they don't control the Horizontal, maybe they don't control the Vertical, but they know the people who do.

Paul John Smith's picture

I think the explanation is hope ...

There's "hope for more hope about stimulus ..."

(that buys you at least one up day)

(but probably > 200M volume though)

(so mostly a selling op)

gmak's picture

It goes up so that those in the know can unload their crap. Have you seen the overnight volumes? It's not hard to ramp futures strongly, especially if you use anything approaching daytime volumes. The trick is unload those purchases in the follow-on when markets open and real volumes come in. 9:30 - 10:00 is the desperate money buying and they get to eat these overnight ramps. Then everyone else comes in and (in a normal world) price discovery takes us to where everything should be.  Note that there is a special circle in hell reserved for many of the Citadel minions.


bentaxle's picture

So, Jim, you finally admit it, the only way you're getting anything up is via QE. This also means you're about as redundant as your pecker, right?