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Market Snapshot: Europe Closes Weak

Submitted by Tyler Durden on 09/19/2011 11:59 -0400

S&P futures drifted gently back up to VWAP as we approached the European close for the now ubiquitous post-Europe-close rally. European sovereign spreads to Bunds are all wider in both 2Y and 10Y with the biggest movers on a risk-adjusted basis shifting from the periphery to the core. Financials are not lifting with the other sectors as ES ramps here and while EUR strengthens very modestly relative to the USD, it seems hand-cuffed to US equities as opposed to leading for now. Volume and average trade size is picking up as we rally here - looking suspiciously like professionals selling into strength given deltas - but it is certainly a decent ramp in the context of the last few days.

ES has traded back up to what was the heaviest volume traded level of 1192 overnight and is around 1 standard deviation above VWAP - and not supported by credit moves either.

2Y EU Sovereign spreads all wider with Holland, France, and Finland worst performers on a risk-adjusted basis

and 10Y spreads all wider also...

Charts: Bloomberg

ITRX Main closed +11bps, XOver +34bps (but Hi-Vol was worst hit at +15bps to 278bps). SovX +16bps to 340bps and financials (senior and sub) around 27bps wider on the day.

European bank stocks closed relatively weakly also - though not at the lows of the day near the open they fell rather quickly into the close - again worryingly suspicious that someone didn't want to long and wrong into D-Day tomorrow.

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Mon, 09/19/2011 - 12:06 | 1684919 GeneMarchbanks

BNP cliff diving, like they're on a Mexican vacation. European financials are flashing 'red' as Sarkozy has a chat with Athens.

OT2 can't come fast enough. Bloomberg reports that The Bernank no longer fears inflation which means(just like QE part deux) open up the swap lines with Europe and then tend to your mass 'protest' domestically.

Mon, 09/19/2011 - 12:12 | 1684922 ramirez

Now when Europe is closed let's sit and wait for the PPT to make Wall Street surge... There's gonna be a long long battle between robots and robots where no man left.

Mon, 09/19/2011 - 12:19 | 1684997 oogs66

one day this going long into european close will fail...it is getting front run earlier and earlier

Mon, 09/19/2011 - 12:06 | 1684933 RobotTrader

Looks like the usual suspects getting ramped: AAPL, CMG, LULU, ISRG, etc. all of which are within a hairsbreadth of new 3-year highs.

All the consumer discretionary stocks are celebrating the outright collapse of the CRB Index and the resurgence of "King Dollar".

Mon, 09/19/2011 - 12:12 | 1684958 adr

If the dollar strengthens all the consumer discretionary stocks are going to be hammered when the corporations lose the ability to inflate foreign earnings 30%.

The ramp job is a few giant hedge funds borrowing from the Fed this morning to make a quick buck on a 0% interest loan. Sell at the end of the day, pay the loan, keep the profits.

When bank stocks are down the "consumer" stocks go up. Gee I wonder if there is a correlation???

Mon, 09/19/2011 - 12:31 | 1685057 Careless Whisper

That's actually a new All-Time high for AAPL. The money has to go somewhere.

How long before it has a market cap of $1 Trillion?

Meanwhile JPM sells at 73% of book value, NFLX is half-price from two months ago, and the handwriting is on the wall for RIMM.

Mon, 09/19/2011 - 12:07 | 1684943 adr

Go algo driven nonsense. Look at the chart for Sodastream today. Dollar swings up and down for no apparent reason.

Lulu, Chipotle, Priceline, BW3 all within a few dollars of all time highs in this environment. Apple trading at an all time high.

Either expectations for Q4 are that it will blow every quarter in history out of the water or the big hedge funds are moving cash around to unload.

Mon, 09/19/2011 - 12:17 | 1684985 msmith

EURUSD continues its bearish trend http://bit.ly/o36OSf. It has a long way to go still http://bit.ly/oYIfxA.

Mon, 09/19/2011 - 12:43 | 1685108 Ursa Major

how do you get that cool 2-Y sovereign spreads chart shown above? what is the bloomy code for the page (I can see the data in the yellow windows, but not the page name)

Wed, 01/04/2012 - 01:56 | 2031929 lupas