Asian Market Rout Goes Global On Tech, Tax And Government Shutdown Tremors

Tyler Durden's picture

A selloff which started in Asia, driven by renewed liquidation of Chinese and Hong Kong tech stocks and accelerated by weaker metal prices which pushed the Shanghai Composite below a key support and to 4 month lows...

... which sent the Nikkei to its worst day since March and the second worst day of the year, while the overall Asia Pac equity index slumped for the 8th day - the longest streak for two years, spread to Europe adn the rest of the world, pushing the MSCI world index lower by 0.3% as investors continued to lock in year-end gains among the best performing assets amid a broad risk-off mood. In FX, the dollar stabilized as emerging-market currency weakness meets yen gains while Treasuries and euro-area bonds gain as focus now turns to efforts to avert a U.S. government shutdown on Saturday. Euro and sterling trade heavy in average volumes while the loonie consolidates before BOC decision.

The VIX was up again in early trading, its eighth day of gains in the last ten sessions as investors grow increasingly jittery about stock markets driven to pricey levels by widespread enthusiasm about the economy.

Investors concerned about high valuations took the top off the tech sector, where stocks such as Facebook, Alphabet, Tencent and Alibaba have reached prices some describe as “eye-watering”.

Quoted by Reuters, Ken Hsia, European equities portfolio manager at Investec Asset Management, said he had shifted positioning this year from tech into other sectors including financials which he thought would gain from higher yields and fiscal shrinking. “Their valuations needed something more heroic in terms of the earnings growth they were reporting, and we sold some and rotated that into other parts of the market,” he said.

“We really don’t see great bargains in any market right now with the U.S. trading at 18.2x price to earnings and 14 percent above its average, and Europe at 15.1x, 10 percent ahead of the average,” said Jefferies analysts in a note.

Asia was broadly lower, with the MSCI Asia index down 1.3% to 167.27 while MSCI Asia ex japan slid 1.5% to 543.05, pressured by a 2% drop in the Nikkei. The MSCI Asia Pacific Index is set to fall for the eighth day, the longest run of losses since 2015, and emerging-market stocks slumped to a two-month low and is nearing a critical 100-DMA support level.

The Shanghai composite recouped some losses, closing down only 0.3%, after the PBoC skipped open market operations for a 4th consecutive day, but lent CNY 188bln via its Medium-term Lending Facility, matching the maturity of a similar maturing facility. Australia's ASX 200 (-0.4%) weakened with miners dampened in Australia by losses across the metals complex in which gold slipped to near 4-month lows and copper prices slumped, while underperformance was seen in Japan as exporters took the brunt of a firmer JPY. Hang Seng (-1.7%) and Shanghai Comp. (-0.9%) conformed to the downbeat tone after the CBRC signalled further regulation in the financial sector and the PBoC skipped on Reverse Repo operations for a 4th consecutive day, but instead opted for its Medium-term Lending Facility. The Hong Kong market tumbled on Wed, with the Hang Seng sliding 2.1%...

... and the Hang Seng China enterprises index down 2.8%, suffering losses seen across the board, but tech stocks leading the drop again with Tencent sliding another over 2.6%. Earlier, it was reported that Pony Ma, Tencent's founder, was very interested in AI healthcare companies; it has invested in at least seven companies of the type.

Elsewhere, automaker BYD plunged near 7%, biggest drop in a year.

Japan's 10yr JGBs were relatively unchanged and failed to benefit from abroad risk-averse tone, while the BoJ’s Rinban operation for JPY 460bln of JGBs concentrated in the belly was also largely ignored.

Europe's Stoxx 600 Index dropped a second day as technology and basic resource shares declined. European tech shares led the fall, with the sector index (SX8P) the worst-performer in the Stoxx 600. The SX8P has lost more than 5% since Nov. 29, when a broad selloff of large-cap U.S. tech stocks began, with the index now testing a key support level and approaching the 200-DMA.  Among biggest decliners on Wednesday are chip stocks AMS, STMicroelectronics and Infineon, which have been among the year’s best performers. U.S. and European technology shares have been falling over the past week amid a widespread rotation from momentum to value stocks, with some investors noting reallocation into financials and industrials, which are seen as more likely to benefit from a U.S. tax cut. That said, Bloomberg notes that some strategists, notably SocGen's Andrew Lapthorne, say that the size of the tech selloff indicates that computer-driven funds liquidated or readjusted factor exposures.

The MSCI Asia Pacific Index is set to fall for the eighth day, the longest run of losses since 2015, and emerging-market stocks slumped to a two-month low. European bonds followed the U.S. benchmark higher. Sterling weakened as efforts to rescue Brexit talks prompted fresh divisions in the U.K. Cabinet. The euro drifted even as an unexpected rise in German factory orders showed Europe’s largest economy will carry its strong momentum into 2018.

Copper prices recovered slightly in early London trading, up 0.1 percent having hit a two-month low, but European mining stocks .SXPP fell 1.1 percent.

As Bloomberg notes, global markets have succumbed to a bout of profit taking as traders move out of some of 2017’s biggest winners, including technology shares and emerging-market equities. The selloff comes as investors assess U.S. tax reform developments and wrangling over the American debt ceiling after a Republican plan to avoid a federal shutdown on Saturday were thrown into disarray by infighting. Investors are “locking in profits earlier than usual for the year and not opening any new positions,” said Andrew Clarke, director of trading at Mirabaud (Asia) Ltd. “Eventually, as profit taking subsides, buying for the new year will appear as people look toward 2018.”

In the ongoing Brexit saga, DUP Party says no plans for a phone call between its leader Foster & UK PM May today. However, it was later reported that UK PM May had been speaking to DUP Party leader Foster. Overnight we also got reports that PM Theresa May is reportedly facing cabinet revolt led by Boris Johnson and Michael Gove over concerns she is forcing a soft Brexit. Similar reports in the Guardian stated that Brexit supporters in May’s top team would object if they believed that anything was agreed that could limit the UK’s ability to diverge from the EU in the future.

In overnight geopolitical developments, the US flew B-1B bombers over the South Korean peninsula, according to the South Korean military, while the Russian Deputy Foreign Minister stated that North Korea has shown interest to Russia’s diplomatic initiative regarding settlement of the situation on the Korean Peninsula and stated that Kim Jong Un is ready for negotiations in any format. Separately, Trump is set to recognize Jerusalem as Israel's capital, although will not specify timeframe for moving embassy to Jerusalem which will take years, according to senior administration. Some see the move as sotking tension between the US and its mid-east allies with the Palestinians’ chief envoy to Great Britain said the move was “declaring war”.

In euro zone debt markets, German 10-year bunds yields were close to three month lows on Wednesday as risk-off sentiment drove investors into safer assets. The two-year Treasury yield fell slightly but still hovered near the nine-year high it’s been driven to by the Fed’s monetary tightening plans and hopes tax reform will boost the economy. The 10Y Tsy yield also declined, helping the yield curve steepen slightly from its decade low. The flattening yield curve has obsessed investors concerned it may be a sign of imminent market stress.

“At the moment it is a market signal to watch and interpret, should the Fed start moving aggressively however it will become key to assessing the market’s longer term economic view,” said Edward Park, investment director at Brooks Macdonald.

Oil declined after industry data showed U.S. gasoline stockpiles expanded for the first time in four weeks. WTI crude futures are lower following the API weekly inventory report which despite showing headline crude inventories at a larger than expected drawdown, was accompanied by large builds in gasoline and distillate components. Elsewhere, gold was relatively flat which provided much needed reprieve from the prior day’s losses that saw the precious metal slump to near 4-month lows, while copper languished following its largest daily decline in 2 years amid increased LME inventories and as Shanghai prices tracked the losses.

Things to keep an eye on today:

  • U.S. ADP data, unit labor costs
  • BOC rate decision; no change expected, traders are speculating policy makers will signal a brighter outlook
  • U.K. PM May’s question time in House of Commons; the European Commission College of Commissioners discusses Brexit progress while May could make her offer to unlock trade talks

Market Snapshot

  • S&P 500 futures down 0.2% to 2,623.30
  • STOXX Europe 600 down 0.6% to 384.40
  • MSCI Asia down 1.3% to 167.27
  • MSCI Asia ex japan down 1.5% to 543.05
  • Nikkei down 2% to 22,177.04
  • Topix down 1.4% to 1,765.42
  • Hang Seng Index down 2.1% to 28,224.80
  • Shanghai Composite down 0.3% to 3,293.97
  • Sensex down 0.7% to 32,582.79
  • Australia S&P/ASX 200 down 0.4% to 5,945.71
  • Kospi down 1.4% to 2,474.37
  • German 10Y yield fell 1.3 bps to 0.307%
  • Euro down 0.05% to $1.1820
  • Italian 10Y yield fell 1.0 bps to 1.442%
  • Spanish 10Y yield fell 0.7 bps to 1.406%
  • Brent futures down 0.6% to $62.50/bbl
  • Gold spot up 0.2% to $1,267.94
  • U.S. Dollar Index little changed at 93.33

Top Overnight News

  • British PM May is facing a revolt from inside her Cabinet over her plan to keep U.K. regulations aligned with the EU after Brexit, a split that threatens to undermine her chances of breaking the deadlock in negotiations
  • The U.S. is ready to talk with North Korea if it renounces further nuclear or missile tests and follows through on the pledge, U.S. Ambassador to China Terry Branstad said
  • The Federal Reserve Bank of Richmond’s decision to hire Thomas Barkin as its next president has renewed questions over the secretive process of selecting U.S. rate- setters
  • German factory orders unexpectedly rose for a third month in October. Orders were driven by gains in export demand for investment goods
  • India’s central bank kept its benchmark repurchase rate unchanged at 6 percent, with five of the six- member monetary policy committee voting for the move. The decision was predicted by 42 of 48 economists in a Bloomberg survey with the rest seeing a cut to 5.75 percent
  • India’s equities rally, which has made the market the region’s most expensive, is causing the nation’s largest investor, Life Insurance Corp. of India, to restrain new purchases through the March year-end

Asia equity markets were lower as the region followed suit from Wall St, where the major indices finished an indecisive trading day mostly negative. ASX 200 (-0.4%) and Nikkei 225 (-2.0%) weakened with miners dampened in Australia by losses across the metals complex in which gold slipped to near 4-month lows and copper prices slumped, while underperformance was seen in Japan as exporters took the brunt of a firmer JPY. Hang Seng (-1.7%) and Shanghai Comp. (-0.9%) conformed to the downbeat tone after the CBRC signalled further regulation in the financial sector and the PBoC skipped on Reverse Repo operations for a 4th consecutive day, but instead opted for its Medium-term Lending Facility. Finally, 10yr JGBs were relatively unchanged and failed to benefit from abroad risk-averse tone, while the BoJ’s Rinban operation for JPY 460bln of JGBs concentrated in the belly was also largely ignored. PBoC skipped open market operations for a 4th consecutive day, but lent CNY 188bln via its Medium-term Lending Facility, matching the maturity of a similar maturing facility. PBoC set CNY mid-point at 6.6163 (Prev. 6.6113). The Indian central bank keps its rates constant as expected: Indian Repo Rate (N/A) 6.00% vs. Exp. 6.00% (Prev. 6.00%); Reverse Repo Rate (N/A) 5.75% vs. Exp. 5.75% (Prev. 5.75%).

Top Asian News

  • Japan Retail Giant FamilyMart Uny Is Said to Mull Hong Kong Exit
  • India Holds Rates as Inflation Nears Central Bank’s Target
  • Alibaba’s Ma Argues China Benefits From One-Party Stability
  • Hong Kong Stock Selloff Quickens as Year’s Top Performers Slide
  • As Selloff Hits Asian Stocks, Some Investors Point to Jerusalem

European bourses have taken the lead from their Asia-Pac counterparts to trade lower across the board. Macro newsflow has been light from a European perspective with focus on the continent continuing to remain on any updates between the UK and Brussels on Brexit with next week’s BoE and ECB meetings unlikely to provide much in the way of fireworks. In terms of sector specifics, material names lag given the recent traction seen in metals markets, notably Copper. IT names are also seen softer in what has been a tough week for the tech sector given rotation plays seen in the US. Notable individual equity movers include Intu Properties (+20%) given their tie-up with Hammerson with German-listed Steinhoff (-59%) markedly lower in the wake of accounting irregularities which have subsequently led to the resignation of their CEO.

Top European News

  • German Factory Orders Unexpectedly Rise Amid Unabated Momentum
  • Surging Koruna Yield May Boost Case for Czech Eurobond Comeback
  • Is This the Silver Bullet for Italy’s Bad Loan Problem?

In FX, the GBP has been undermined by ongoing Brexit deal apprehension and latest pressure on UK PM May on the home front. Cable has revisited bids/tech support under 1.3400. GBP has been hampered throughout the latest press statement from David Davis with the Brexit secretary failing to assure markets that he has carried out a thorough assessment of post-Brexit life for the UK. JPY has been the main beneficiary of risk-off positioning, with USD/JPY back down towards the 112.00 following peaks just above 113.00 in recent sessions. Elsewhere, NZD vying for the title of top G10 currency performer, but by virtue of weakness in its AUD antipodean counterpart. CAD likely to come into focus ahead of the BoC meeting at 1500GMT. Australia’s dollar dropped and bonds rose as slower-than-expected GDP growth spurred traders to delay their expectations on interest-rate increases. Australian GDP (Q3) Q/Q 0.6% vs. Exp. 0.7% (Prev. 0.8%, Rev. 0.9%), Australian GDP (Q3) Y/Y 2.8% vs. Exp. 3.0% (Prev. 1.8%, Rev. 1.9%)

In commodities, energy markets have been lacklustre thus far with WTI crude futures softer following the API weekly inventory report which despite showing headline crude inventories at a larger than expected drawdown, was accompanied by large builds in gasoline and distillate components. Elsewhere, gold was relatively flat which provided much needed reprieve from the prior day’s losses that saw the precious metal slump to near 4-month lows, while copper languished following its largest daily decline in 2 years amid increased LME inventories and as Shanghai prices tracked the losses

Looking at the day ahead, another another key date arrives for Brexit talks with the EC College of Commissioners likely to make a recommendation on whether or not sufficient progress has been made. UK Brexit Secretary David Davis is also due to address a Brexit Parliamentary Committee. Away from that, the most significant data release will be the November ADP employment change report in the US, while final revisions to Q3 nonfarm productivity and unit labour costs will also be released. German factory orders for October will be out in the morning. Away from that the BoJ’s Masai speaks early in the morning, while the ECB’s Mersch speaks later on. In the afternoon, UK Chancellor of the Exchequer Philip Hammond is due to speak at the Treasury Select committee.

US Event Calendar

  • 7am: MBA Mortgage Applications, prior -3.1%
  • 8:15am: ADP Employment Change, est. 190,000, prior 235,000
  • 8:30am: Nonfarm Productivity, est. 3.3%, prior 3.0%
  • 8:30am: Unit Labor Costs, est. 0.2%, prior 0.5%

DB's Jim Reid concludes the overnight wrap

Morning from Germany. Maybe the way Brexit talks are going I should have brought my chequebook with me and scrambled enough money together to reserve the few school places left and put a deposit down for a flat before property prices get out of hand. I’ve always been very resistant to working abroad as I’d miss the domestic UK sport on TV. However yet again I find myself watching the England cricket team live on my iPad from Australia via a VPN connection. However after a rousing day yesterday where a miracle comeback was looking increasingly possible England have capitulated this morning and have just lost as I’ve been typing this. So maybe moving somewhere that doesn’t show the cricket might not be such a bad idea.

The mood in Asia is matching that of an England cricket fan this morning with markets down sharply. China’s CSI 300 (-1.31%), Kospi (-1.28%), Hang Seng (-1.80%) and Nikkei (-1.95%) are all down as we type. For the latter two, all sectors are in the red with losses led by auto car marker and speciality retailing sectors respectively. The Nikkei is on course for its worst day since March and the second worst day of the year. Overall the Asia Pac equity index is now down for the 8th day - the longest streak for two years.

This follows another day when US equities couldn’t hold on to early gains. However the recent sector rotation out of tech did partly reverse yesterday. The Nasdaq was up +0.9% in the morning, but gains were pared back with the index down 0.19% for the day. Both the S&P (-0.37%) and Dow (-0.45%) also reversed course and weakened into the close with only the tech sector in the green (+0.21%) while losses were led by the telco (-1.78%) and utilities sector. The mood has changed quite sharply from the Monday’s early trading where tax reform euphoria dominated.

Staying in the US, the nomination of new Fed Chief Powell was formally passed by the Senate Banking Committee by a 22-1 vote, with the lone against vote reportedly due to concerns that Mr Powell may weaken financial regulations. Elsewhere, the reconciliation of the House and Senate’s versions of the tax bill continues, with some of the current debate focusing on whether to repeal the alternative minimum tax rate.

Back in the UK, there does not seem to be a breakthrough on Brexit talks, but EU officials expect PM May to return to Brussels later in the week to discuss next steps. Yesterday, the Brexit Secretary Davis proposed aligning some of Britain’s economy regulations to those in the EU to get talks back on track, although Foreign Secretary Johnson later raised concerns that this may dilute Brexit, in part due to reduced flexibility on trade deals around the world. Further, Scotland’s conservative leader Ruth Davidson noted if Northern Ireland is able to get access to the EU single market, then so must the whole of the UK. Elsewhere, Chancellor Hammond was relatively upbeat, noting “I’m optimistic that we’ll achieve sufficient progress at the (EU) Council next week, and move on to the next stage of negotiations”. On the other side, the EC spokesman Ms Schinas said “the show is now in London…we stand ready…to resume talks…at any moment when we get the sign that London is ready”. So much at stake over the coming days and weeks.

Following on Brexit, DB’s Oliver Harvey believes the question of a December breakthrough is now in doubt after the DUP rejected the proposed compromise over Northern Ireland’s status after Brexit, and so scuppering talks. He notes that the failure of the UK to reach agreement is problematic for four reasons. 1) the DUP appears to have drawn a red line over continued regulatory alignment between Northern Ireland the Republic. 2) proposed regulatory alignment between Northern Ireland and the Republic has emboldened leaders of other devolved administrators, most notably in Scotland. 3) the rejection of the deal has emboldened some hard Brexiteers within the Conservative Party, and 4) time is now tight. The UK must reach a final agreement by the end of this week to have a chance of reaching sufficient progress at next week’s Council. Overall, Oliver’s baseline view remains that sufficient progress will however be reached, after compromise with the DUP.

Now recapping other markets performance from yesterday. European bourses were broadly lower, with the Stoxx 600 (-0.19%), DAX (-0.08%) and FTSE (-0.16%) all modestly down, impacted by mining stocks following a fall in base metals and copper prices. Peripheral markets such as Spain’s IBEX (+0.03%) and Italy’s FTSE MIB (+0.24%) outperformed, with the latter likely helped by a solid PMI reading. Elsewhere, after six consecutive days of gains, the VIX fell 3% yesterday to 11.33.

Government bonds were firmer with core 10y yields down 2-3bp (UST -2.1bp; Bunds -2.4bp; Gilts -2.9bp). The flattening across the treasury curve has continued, with the 2s10 now down to 53bp (-3bp) and 5s30s down to 59bp, with the latter below 60 for the first time in a decade. Elsewhere, Greece’s 10y bond yields fell below 5% for the first time since 2009, following news over the weekend that Greece has reached a pact with international creditors which has since been approved by the Eurogroup on Monday. Note that 10y bonds were yielding over 18% back in July 2015.

Turning to currencies, the US dollar index firmed 0.13% while Sterling and the Euro weakened 0.27% and 0.34% respectively. In commodities, WTI oil was broadly flat while precious metals weakened c1% (Gold -0.82%; Silver -1.33%). Elsewhere, copper fell the most in c3 years (-3.32%), impacted by a rise in stock piles and expected slower demand from China, while other base metals also trended lower (Aluminium -1.40%; Zinc -2.05%).

Over in Germany, a Spiegel online election poll suggests SPD respondents favour a minority coalition government with Ms Merkel’s CDU/CSU party. In the details, 28% of the SPD respondents favour a grand coalition and 57% is in favour of tolerating a minority government. In terms of party preference across all respondents, there were little changes versus last week with CDU/CSU achieving 31% support and the SPD at c20%.

In the US, the Fed’s Evans has reiterated his dovish views on rates. He noted “is there really a hurry to raise rates?” as the data he has been looking at have not been strongly indicating “we should continue with a rate increase’. Further, he said “maybe we would stop briefly and assess for more info, maybe wait until mid-2018”.

Before we take a look at today’s calendar, we wrap up with other data releases from yesterday. In the US, the November non-manufacturing ISM retreated from last month’s 12 year high and was slightly lower than expectations at 57.4 (vs. 59 expected). In the details, the activity index eased 0.8pts to 61.4, but the employment index fell 2.2pts to 55.3 and the new orders index fell 4.1pts to 58.7, perhaps reflecting an end to the post-storm restocking. Elsewhere, the final reading for November’s US PMIs were slightly softer, with the composite PMI at 54.5 (vs. 54.6 previous) and services PMI at 54.5 (vs. 55.2 expected). Finally, the October trade deficit was more than expected at -$48.7$bln (vs. -$47.5bln), with exports flat for the month but imports rose 1.8% mom and 7.4% yoy.

In Europe, the final reading of November’s PMIs were a bit mixed. For the Eurozone, the services (56.2) and composite PMI (57.5) were both unrevised, with the latter at a six year high. Across the countries, France’s composite and services PMI were both 0.2ppt higher than expectations, at 60.3 and 60.4 respectively, with the latter at the highest since May 2011. Over in Italy, the composite (56 vs. 55 expected) and services PMI (54.7 vs. 53.2 expected) were also above market. Conversely, both Germany and UK’s readings were below market, with Germany’s composite PMI at 57.3 (vs. 57.6) and services at 54.3 (vs. 54.9), while the UK’s composite PMI came in at 54.9 (vs. 55.8) and services PMI was weaker at 53.8 (vs. 55 expected).

Elsewhere, the Eurozone’s October retail sales number was below market at -1.1% mom (vs. -0.7% expected) and 0.4% yoy (vs. 1.6% expected) but Spain’s  October IP was above at 0.6% mom to lift annual growth to 4.1% yoy (vs. 3.6% expected).

Looking at the day ahead, another key date arrives for Brexit talks with the EC College of Commissioners likely to make a recommendation on whether or not sufficient progress has been made. UK Brexit Secretary David Davis is also due to address a Brexit Parliamentary Committee. Away from that, the most significant data release will be the November ADP employment change report in the  US, while final revisions to Q3 nonfarm productivity and unit labour costs will also be released. German factory orders for October will be out in the morning. Away from that the BoJ’s Masai speaks early in the morning, while the ECB’s Mersch speaks later on. In the afternoon, UK Chancellor of the Exchequer Philip Hammond is due to speak at the Treasury Select committee.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
nmewn's picture

SELL ALL THE THINGY THINGS! GO LONG VENEZUELAN PETROBITZ!!!

shitshitshit's picture

Where's the bennyboy when we need him to print the fuck out of his presses?

ParkAveFlasher's picture

Janet is the ultimate SJW, "let's see Trump get elected now that I won't hit ctrl P ... oh wait"

waterwitch's picture

Get your algos ready,

Buy the fucking dip now,

Looking for a great deal,

Or whatever comes along,

chorus:

BTFD

 

(to the tune of Born to be wild)

gladitsover's picture

He's frying up some latkes.

Erek's picture

There won't be any government shutdown on Saturday or at any other time.How much longer will "they" be hyping this crap?

On the otherhand, the average Joe Citizen is well on the way to being shutdown, but never .gov.

yogibear's picture

Central banksters usually do their dirywork aftter hours. Easier to prop markets up.

elegance's picture

Marvelous. All going to explode on Trump's watch. He was stupid enough to claim the rise => he will own the crash as well.

ParkAveFlasher's picture

Sure it'll explode, then comes the swoop in buy up of distressed assets.

Arnold's picture

There is no pleasure without pain.

--Ying and Yang

Gead's picture

In keeping with the season - sing it ALL!!: 

"....And since we've no place to go
Let it snow, let it snow, let it snow

Man it doesn't show signs of stoppin'
And I brought some corn for poppin'
The lights are turned way down low
Let it snow, let it snow, let it snow When we finally kiss good-night
How I'll hate going out in the storm
But if you really hold me tight
All the way home I'll be warm And the fire is slowly dying
And, my dear, we're still good-bye-ing
But as long as you love me so
Let it snow, let it snow, and snow..."
wmbz's picture

Just another BTFD point in time.

People waiting/looking for a crash are once again going to be disappointed.

gatorengineer's picture

One of these times it will be different, but I cant see this being the time.  My pick is that it closes green

WatchingRomeBurn's picture

#cultofsaturn never loses

onthedeschutes's picture

Not to worry...the PPT is on it.

yogibear's picture

Remember the Santa Claus rally!