European Stocks Soar (And So Do Peripheral Bond Yields!)

Tyler Durden's picture


It's another one of those hope-fueled days in Europe as European stock indices across evey nation close comfortably in the green as the EU Summit begins. Germany has taken all the substantive things off the table and Cyprus and Portugal threw in the towel but nevertheless, stocks are 1-2.5% higher (with Italy and Spain outperforming). We assume this is reflexive pricing of 'the crisis is now so scary that the ECB will have to do something' but it seems the FX and Sovereign bond market missed that pre-emptive hope-driven view as Portugal yields/spreads spiked, Spain pushed back up to 6.93% and saw further flattening in its yield curve (as short-dated LTRO-enthused bonds underperform dramatically) as 2s10s is almost back to six-month pre-LTRO levels. Italian spreads pulled off their worst levels to close mixed but remains over 40bps wider on the week. EURUSD closed down over 35 pips at 1.2450 and stocks were in a world of their own also relative to credit markets today.

Equities remain well down in the last week or so but bounced into the close today...

but Sovereigns remain extremely weak...

as Spain's 2s10s yield curve flattens to six-month pre-LTRO1 levels - leaving all those LTRO 'Sarkozy' trades underwater...

and stocks appear to be in a world of their own compared to credit markets once again...


Charts: Bloomberg

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Wed, 06/27/2012 - 12:00 | 2565218 Winston Churchill
Winston Churchill's picture

What part of NEIN do these markets not understand ?

Wed, 06/27/2012 - 12:05 | 2565233 Colombian Gringo
Colombian Gringo's picture

These irrational markets are proof that europeans have a sense of humor.

Or that in Germany, Nein means  tie me up and give it to me harder, baby!


Wed, 06/27/2012 - 12:13 | 2565256 Stoploss
Stoploss's picture

Got to get back to friday's vwap, almost there.


And bill auctions also, can't forget those.

Wed, 06/27/2012 - 12:14 | 2565267 NotApplicable
NotApplicable's picture


Hey Tyler! Check out what Celente has done. It appears he's tired of all the MFG banksters on this MFG planet.

Yep, he done went full retard. (TPTB will NOT be happy)

The 2nd American Revolution.

This should be interesting.


Wed, 06/27/2012 - 12:22 | 2565295 GeneMarchbanks
GeneMarchbanks's picture

The 2nd American Revolution sounds a lot like plain old Apathy to me.

I'm sure 'TPTB' are, like, concerned and stuff.

Wed, 06/27/2012 - 12:30 | 2565315 CPL
CPL's picture

Yeah...TPTB is probably wondering how to spin the current mess into gold.


If they had any gold...I see lots of numbers of tonnage in PMs and the regular materials being spun in the media, nobody seems to make the announcements on delivery.  Just the fact they are ordering it.

Wed, 06/27/2012 - 12:36 | 2565324 NotApplicable
NotApplicable's picture

They will be if he can turn what you view as "apathy" into a vehicle of expression of disgust with the status quo. The difference between this, and the other attempts such as OWS and the Tea Party, is that his call is to AVOID political "solutions," not to seek them out.

I guarantee you NOTHING scares TPTB more than the idea that the masses realize they are better off WITHOUT them.

OWS and the Tea Party both seek control of the gun of obedience. Celente seeks to disarm it completely. Nothing would be more hilarious than an election with say... a 10% voter turnout, as it would undermine the whole idea of consent of the governed in relation to the global criminal regime masquerading as government.

Wed, 06/27/2012 - 12:54 | 2565359 GeneMarchbanks
GeneMarchbanks's picture

I guarantee you NOTHING scares TPTB more than the idea that the masses realize they are better off WITHOUT them.

That's like trying to solve a problem of social atomization buy isolating oneself. You need to think before you post.

Guess what? Voter turn-out is on the decline in many European countries but things carry on as usual.

If this is what it has come down to I truly fear for the republic.

Wed, 06/27/2012 - 12:23 | 2565294 HardlyZero
HardlyZero's picture

Is it true Italy has staying power...and will stay at the Summit until Sunday night ? !

Monti said he was willing to put in a few extra days so Germany can 'figure out' what to do.

Monti is gentle and caring that way with the virgin Merkel.

What staying power !


Wed, 06/27/2012 - 12:41 | 2565356 Sudden Debt
Sudden Debt's picture

And the stopword is "print"

Wed, 06/27/2012 - 13:25 | 2565517 Stock Tips Inve...
Stock Tips Investment's picture

I think there is some manipulation. The market has fallen "enough" as to produce a "technical bounce". Of course, aided by money from the rescue of Europe. Not all of this money can go to the bank with problems or to countries with problems. Some also have to go where investors into trouble. In my city said: "When it rains, everyone gets wet."

Wed, 06/27/2012 - 16:30 | 2566283 Curtis LeMay
Curtis LeMay's picture

Ah, the magical rhythm stick!

Wed, 06/27/2012 - 12:22 | 2565282 Eireann go Brach
Eireann go Brach's picture

Look who is out spewing even more nonsense this morning..our beloved Larry Yun chief cheerleader for NAR (National Association of Retards)

House Prices to increase 10%?

Leave it to the NAR to get overly enthusiastic.

From Jeff Collins at the O.C. Register: Realtor guru: 10% home-price jump possible

"This time next year, there could be a 10% price appreciation. I would not be surprised to see that,” [National Association of Realtors Chief Economist Lawrence] Yun said.

It is one thing for prices to stop falling - and maybe increase a little over the next year. But, in addition to the large number of homes in the foreclosure pipeline, there are also many people waiting for a "better market" to sell - and I suspect the slightest appreciation will bring more inventory to market. A 10% increase over the next year? Well, three words: Not. Gonna. Happen.

Wed, 06/27/2012 - 12:20 | 2565289 disabledvet
disabledvet's picture

First off it's called EFFICIENT market theory...not "rational market theory." second "I can discount the collapse of the euro" is absolutely doable.(if your Wall Street..and Wall Street only of course.)

Wed, 06/27/2012 - 13:19 | 2565484 rotagen
rotagen's picture

Same old thing.  Look for  the big tanking to begin shortly.

Wed, 06/27/2012 - 12:00 | 2565221 machineh
machineh's picture

Evidently the hackers who stole 60 million euros are buying stocks!

Wed, 06/27/2012 - 12:15 | 2565271 midgetrannyporn
midgetrannyporn's picture

hackers, yeah, riiight.

Wed, 06/27/2012 - 12:43 | 2565361 Sudden Debt
Sudden Debt's picture

If taxing doesn't work....

Wed, 06/27/2012 - 12:02 | 2565225 Cognitive Dissonance
Cognitive Dissonance's picture

False hope binds us to impossible situations.

Wed, 06/27/2012 - 12:04 | 2565229 InsurgoCasca
InsurgoCasca's picture

Crap, I'm outta popcorn!! :(

Wed, 06/27/2012 - 12:04 | 2565230 falak pema
falak pema's picture

I love this zig zag of ZH posts; Europe drowning in debt but with soaring stocks!

Markets and commentary dance out of step. Doom and bloom.

Wed, 06/27/2012 - 12:17 | 2565280 Strider52
Strider52's picture

I can't imagine anybody investing in stock markets, especially European, with Financial Collapse coming any day now.

Wed, 06/27/2012 - 13:27 | 2565524 Stock Tips Inve...
Stock Tips Investment's picture

I agree ... if there was some manipulation. The market has fallen "enough" as to produce a "technical bounce". Of course, aided by money from the rescue of Europe. Not all of this money can go only to the troubled bank or to countries with problems. Some also have to go where investors into trouble. In my city said: "When it rains, everyone gets wet."

Wed, 06/27/2012 - 13:11 | 2565459 CrashisOptimistic
CrashisOptimistic's picture

The odds would seem high that there has been a rumor that we have missed.

Wed, 06/27/2012 - 12:04 | 2565231 slaughterer
slaughterer's picture

Slow-mo POMO trading day to train the new guy at the NYFED replacing Sack.  They have to take it easy on him.  It is difficult work ramping the markets on taxpayer money, and the trainers do not want to explain everything too fast to avoid that he forgets things later.  

Wed, 06/27/2012 - 12:15 | 2565274 NotApplicable
NotApplicable's picture

Is Friday Sack's last day?

Should we send a card or something?

Wed, 06/27/2012 - 12:13 | 2565245 LouisDega
LouisDega's picture

To quote Emperor Joseph II,  The musical king.. "Well, there it is "


Wed, 06/27/2012 - 12:07 | 2565247 crawldaddy
crawldaddy's picture

the eulogy for the 21st century.."those bankers werent so smart afterall,  just greedy"

Wed, 06/27/2012 - 12:07 | 2565250 HaroldWang
HaroldWang's picture

Really, couldn't you see this coming?? We've seen the same movie several times now and they always come up with something that never materializes but makes the markets rally. Of course "something" will get done at the summit and everyone will be happy for another several hundred Dow points until it comes around again at the end of the year or early next year. Seriously, it's not that difficult, gang.

Wed, 06/27/2012 - 12:09 | 2565254 Fourth Horseman...
Fourth Horseman of the Apocalypse's picture

End of the month and the quarter ramp.  

Wed, 06/27/2012 - 12:10 | 2565255 Der Wille Zur Macht
Der Wille Zur Macht's picture

Welcome to the Twilight Zone, where things are not what they seem!

Wed, 06/27/2012 - 12:11 | 2565258 tmosley
tmosley's picture

Feels like things are shaking apart now.

Wed, 06/27/2012 - 13:12 | 2565461 Itch
Itch's picture

Then keep shaking them.

Wed, 06/27/2012 - 12:11 | 2565260 tarsubil
tarsubil's picture

Name something that is constantly fixed but always broken.

Wed, 06/27/2012 - 12:12 | 2565261 monopoly
monopoly's picture

Exactly why shorting this market for more than a few hours is very, very difficult to do. You would think all the debt, all the insolvency, all the bankruptcy that is about to emerge just went Poof! And we rally. Buy em. This will get very ugly.

Wed, 06/27/2012 - 12:13 | 2565265 tocointhephrase
tocointhephrase's picture

Get the hell out of dodge!

Wed, 06/27/2012 - 12:16 | 2565278 HaroldWang
HaroldWang's picture

Why?? As I said before, everyone knows something will come out of this summit to appease the markets for another six months or so. Then, it all repeats again, and again, and again. Not that difficult to see.

Wed, 06/27/2012 - 12:25 | 2565297 Mark123
Mark123's picture

I doubt that....extend and pretend only works until it doesn't. 

I get the sense that the big players are taking their money out of the casino.  Most of that is happening in the shadow banking system for now.

Ask youself....if you had $100 billion cash sitting in a safety deposit box what would you do with it?  Lend it to Spain?  Lever it up 30x and invest in some exotic derivative managed by Goldman Sachs? 

Given all the uncertainty (NOT panic)....I think most would be conservative with their own wealth.

Wed, 06/27/2012 - 12:33 | 2565322 HaroldWang
HaroldWang's picture

Extend and pretend has lasted a very long time and many have profited handsomely off that policy. No different this time.

Wed, 06/27/2012 - 12:14 | 2565269 potlatch
potlatch's picture

Threw in the towel?  Spiderman beach towels, or just plain-old-towel towels?

Wed, 06/27/2012 - 12:15 | 2565273 monopoly
monopoly's picture

Twilight Zone. Perfect! I am very scared.

Wed, 06/27/2012 - 12:16 | 2565277 midgetrannyporn
midgetrannyporn's picture

the fly approves this message. buy yelp, lulz

Wed, 06/27/2012 - 12:17 | 2565281 Mark123
Mark123's picture

Germany provided Eurotrash with unlimited cheap vendor financing and became the producer of quality goods to the their customers are broke and so they have to decide if they transfer their domestic savings (wealth) to bankrupt customers who will spend it all to keep their factories running.

The USA and China are in much the same situation.

The world believes that cheap vendor financing can continue without anyone paying for the losses already in the system.  How?  Central banks will expand their balance sheets!!  The trouble is that we are in a debt based fiat is backed by debt that is repaid.

oops.  choices are depression or currency collapse



Wed, 06/27/2012 - 12:20 | 2565288 Village Smithy
Village Smithy's picture

Equities are reminding me of the carnival game where you piss unlimited amounts of water (or free money from ZIRP) into the target and it drives the meter (S&P, DAX, FTSE.. whatever) up and up until someone hits the top and then wheee, the meter plunges back to zero (flashcrash). Step right up!

Wed, 06/27/2012 - 12:21 | 2565293 TrainWreck1
TrainWreck1's picture

Only one answer explains this. Obama has performed another miracle.

Wed, 06/27/2012 - 12:30 | 2565311 HardlyZero
HardlyZero's picture

The European Funding for US Healthcare must have finally come through!

Now what will the supremes say to foreign funding of US healthcare...!  

(that is the only possible upside tomorrow...maybe the markets trading on that)

Or maybe the whole Universal (and Global) Jubilee has finally arrived.

Wed, 06/27/2012 - 12:37 | 2565336 DrDinkus
DrDinkus's picture

broken record, we all keep waiting for the next shoe to drop...but something, i dont know what, but somethinggggg makes me think this time is different. teetering on the brink..

Wed, 06/27/2012 - 12:38 | 2565339 DavidC
DavidC's picture

Stocks rising on end of month, end of quarter, end of 6 months? Got to make the figures look good.


Wed, 06/27/2012 - 12:41 | 2565355 nobusiness
nobusiness's picture

Bankers need some Hamptons cash.  the ramp will continue

Wed, 06/27/2012 - 13:18 | 2565441 slewie the pi-rat
slewie the pi-rat's picture

altho none here will mistake this price walk as risk0n, haven't the EU stocks taken a bigger % dump than "our" multinationals?

and isn't the EU goobernance about as hog-tied as the US as ever been, politically

this leaves us at slewie's NADA solution to the goldilocksCrisisTM ;  in slewienomincs:  nada = the null hypothesis;  i see that hardly_zero is here commenting above;  his avatar is the schematic for a null circuit  connecting something around the crotch to the brain;  this is the male "metal detector" so if this is a chick, she is very deep...

hopefully those who have ruined their lives with drugs, alcohol, herpes and preying on children will continue to party like it is 2012 while those who have ruined their lives with debt will:

  • eat shit
  • lay eggs
  • die young
  • and go to heaven, too, BiCheZ!

slewie boldly PREDICTS:  not only will this fuktard summit be the most expensive by a factor of 3.14:1 as the diameter becomes the circumference, it will not accomplish a fuking thing AND it will be economically successful, too! L0L!!!

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