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Europe Opens Weak Ignoring Overnight US Exuberance
European corporate and financial credit markets are opening weak this morning - ignoring the exuberance in overnight ES futures (11,000 contracts in seconds on rumor of China for 10pt jump?) which is also leaking back rapidly to VWAP (even as European equity markets continue to levitate). Financials especially are now beyond yesterday's wides with subordinated spreads the underperformer for now. This extends from our comments yesterday that were picked up on CNBC with regard to the 'stigma-trade' in LTRO-encumbered banks (which is widening further this morning) as well as broad divergence between stocks and credit. Concerns over Ireland's fiscal consolidation plans balanced with a very slight beat on German GDP (though still negative) are seeing EURUSD leak back off its best levels of the night after it bounced off 1.31 in late US trading (on Samaras rumors then extended by this China chatter). Gold and Silver are pushing higher while Copper and Oil are stable for now (though notably up from yesterday's European close). European sovereigns are quiet for now while US Treasuries are slightly better bid.
Perhaps a quick refresher on the current state of affairs in the US, Europe, and Japan is in order: the financial sectors in all these regions are over-leveraged and almost entirely opaque; on a medium- to long-term basis the regions' balance sheets are insolvent - with no hope of paying expected entitlements/benefits/moneys-owed no matter what level of growth, despair of austerity, or taxing-the-rich is put in place; Fiscal, tax, and regulatory policies are unsound and in no way designed to spark growth or efficiency; and monetary policy is entirely extreme and experimental.
As was noted to us by several readers today from an uncited hedge fund manager: "If global stock markets rise sharply, the increase might not be caused by savvy investors’ shrewd optimistic assessment of the prospects of solid fixes to these problems, but may merely be a symptom of the monetary radicalism and reflect a flight from “paper” to something real or a lack of good alternatives."
Chart: Bloomberg
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And everything surging on some china rumor? it's like they're don't even care if the markets have any semblance or legitimacy.
What goes up must come down.
Seriously....WTF?! Somebody print some money!!!
Ahhh....that's better - http://finance.yahoo.com/intlindices?e=europe
Just because the FTSE100 was down a penny? That's ridiculous!
Tyler? Trying to mislead the 'dumb' money?
Is that ethical? Is that morally sound practice?
Everybody repeat this prayer twice a day and all will be fine:
Gold Gold Gold Silver Silver Silver Gold Gold Gold Silver Silver Silver Gold Gold Gold Silver Silver Silver Gold Gold Gold Silver Silver Silver Gold Gold Gold Silver Silver Silver Gold Gold Gold Silver Silver Silver Gold Gold Gold Silver Silver Silver Gold Gold Gold Silver Silver Silver Gold Gold Gold Silver Silver Silver Gold Gold Gold Silver Silver Silver Gold Gold Gold Silver Silver Silver Gold Gold Gold Silver Silver Silver Gold Gold Gold Silver Silver Silver Gold Gold Gold Silver Silver Silver Gold Gold Gold Silver Silver Silver Gold Gold Gold Silver Silver Silver Gold Gold Gold Silver Silver Silver Gold Gold Gold Silver Silver Silver Gold Gold Gold Silver Silver Silver Gold Gold Gold Silver Silver Silver Gold Gold Gold Silver Silver Silver Gold Gold Gold Silver Silver Silver Gold Gold Gold Silver Silver Silver Gold Gold Gold Silver Silver Silver Gold Gold Gold Silver Silver Silver Gold Gold Gold Silver Silver Silver Gold Gold Gold Silver Silver Silver Gold Gold Gold Silver Silver Silver Gold Gold Gold Silver Silver Silver Gold Gold Gold Silver Silver Silver Gold Gold Gold Silver Silver Silver Gold Gold Gold Silver Silver Silver
Feeling better already, are we?
Well, technically what you are saying can be misleading as well. Gold and Silver can reverse and start a bear market. It's been going nowhere for months and might just try to form a topping pattern.
Soros and some technical analysts have said about this possibility.
Well, technically what you are saying can be misleading as well. Gold and Silver can reverse and start a bear market. It's been going nowhere for months and might just try to form a topping pattern. Soros and some technical analysts have said about this possibility.
Right, that's one of the reasons nobody would invest with Soros. *haha*
Gold and Silver reverse?
Talking of hedge funds: Smart money has left PMs a while ago...
The money is elsewhere, friend, you must use your brain and thing independently. Analysts? What Analysts? Who are they?
We'll see in the next six months where gold is. Let Mr Market decide. If its $2000, you're right, if it's $1300, you're wrong.
The LTRO, the equivalent of QE since Dec doesn't propel gold. Japan's money printing also so far doesn't result in gold spike. Is it inflation trade or fear trade? It could be fear trade and if the fear of sovereign debt subsides, it could drop.
Regarding analyst, you can check out recent video by Oppenheimer chief analyst at cnbc web site.. GL with your gold and silver
Do you think I am advocating Gold/Silver?
Did I make myself clear?
Did I miss to put a /sarc ?
Europe opens weak? ---> http://finance.yahoo.com/intlindices?e=europe
only green, at least for the opening!
Greece is red, all of Europe green.
It'll be the opposite when Greece finally leaves the snake pit aka EU.
Neqative GDP prints from Netherlands, Austria and Germany are giving a nice boost to equities, lol!
@lunar...think they're referring to credit markets
@lunar...think they're referring to credit markets
Will trade dead horse for dead cow. Ask for Tim or Ben.
...I am probably going to get a lot of ngative feebdback here but here's my tuppence worth: a body that has a monopolistic mandate to create out of nothing, something that everybody wants, holds TOTAL power ...until the paradigm shift occurs that recognises the worthlessness of what is being created> I think we are along way from that shift. If I went to my local store and offered an ounce of silver for a $33 item, they would tell me to get lost. But 33 pieces of Bernankes paper gets me what I want. I just think that we are a whiles away from the paradigm shift . Robo trader is right in his mantra : do no t underestimate the power of infinite fiat. Patience people, patience.
again there were two or three sudden "magical" rebounds and surges in futures of main indices before US close and overnight. In a space of merely 10 to 30 minutes, futures make disproportionate jumps supposedly on "rumors", then are kept on a flatline level or ramped-up in almost linear fashion, offsetting index declines that took several hours or even days to complete. VIX has been killed down two times in past 5 trading days, in the hour before US closing. Is it a coincidence that this happens in days before Option expiry? Must S&P be kept somehow above 1350 at all cost, Euro above 1.30$, so as to secure the "investments" in connected derivatives? Who made "informed" bets on those levels being achieved or maintained and who has the means to move things in that direction?
Is it simply the result of instant hedging in the grand game of carry trades? Sudden short-squeezes (but seen no long-squeezes for months...)? Lack of volume maybe, making it easy for HFT or other "entities" to move markets in any given direction on a minimum transaction size...? Central Banks interventions? A random combination of the previous?
The general market ramp-up we've seen since Dec. 1st 2011 looks incredible (to me), reminds of similar "strange" periods in 2009 and 2010 - markets almost moving up in a straight line with small retractions that are "corrected" or muted overnight, and this in ever shorter intervals of sudden "recovery" moves. Intra-day indices and futures move up or down in tight lockstep, like everything is 100% correlated in globally communicating vessels, even though they are composed of different types of stocks. On an absolute basis, Wall Street has disconnected from EU and reality, managing to reach a level that is at least 20% richer than EU counterparts, in spite of breaching the US debt ceiling, (clearly false) perceptions of "improvements" in the jobs market, stalling and falling global economic activity (BDI below 1000), etc...
Should we all just start doing the exact opposite of what appears to be the most rational, logical and fundamentally sound investment decision at any given moment and in the near future? Or will the game or the rules change instantly then?
Don't try to be heroes and calling for a top when there's no evidence of reversal and/or broken trend line. That's the recipe for bankruptcy.
Ahh but yesterday we were oh so close to that trend ending... The trend is your friend until the trend shifts and you're the one holding the bag.
Dude... the market can crash 5% and it's still bullish in the medium run. Heck, we haven't had any meaningful retracement since late December last year. Trend is usually not going to reverse instantly, especially with this speed and strength. People desperately want some bad news so that market can sell off meaningfully so they can jump into it. No luck so far.
I am not saying people need to buy at this level, since it's overbought in the short term. But to call for a top and trying to short is equally dangerous as well. Better option is to wait for some meaningful retracement and go long. But that's just me following the trend and not imposing a particular world view
I agree with pretty much everything you just said actually, except the part about people desperately wanting bad news so they can go long. We've been stuck in this range for a while now and I was hoping yesterday we'd see the start of the retracement. Still can happen. Then with a little luck we'll retest the highs around mid-March (muhahaha).
This market is one for the twilight zone.
Did I hear rentless bid, untill........?
but but france grew someway somehow::))we know howww hahaha...who believes in these bs numbers anymore..
anyone know who or what came in trading at 20:30 and 2:20 GMT and succeeded to push ES up 17-18 points in two short steps lasting less than 30 minutes?