This page has been archived and commenting is disabled.

Overnight Sentiment: Bad News Is Good On More Hope And Prayer

Tyler Durden's picture




 

It is just getting stupid. Europe officially enters recession, Japan GDP declines nominally, China admits to food inflation which locks the PBOC out of easing for months, UK inflation is again rising faster than expected which will soon force the BOE to reevaluate its latest easing episode, Brent is once again rising on supply fears and middle east war fears to a 3 month high, corporate revenues have never been worse in this recession cycle and what happens? Futures spike following a very visible invisible finger pushing ES higher by 0.5% at 9 pm Eastern and setting the scene for trading throughout the night. And since the market has reverted back to full retard mode full of hope of an absolution from the Fed, this time at the August 31 Jackson Hole meeting, which will be very disappointing as Ben will say absolutely nothing yet again, why not take the S&P to new 2012 highs? After all well over 100% of QE3 is now priced in. Finally, expect the ES to surge by 10 points should advance retail sales miss wildly the consensus of a +0.3% print. After all, inverted is the NKI.

From BofA

Asian equity markets rose overnight, helped by Bank of Japan minutes showing that policymakers may adopt options to boost growth. The Nikkei picked up by 0.5%, a bit more than the 0.3% posted by the Shanghai composite. The Hang Seng index and the Kospi climbed even higher, rising by 1.05% and 1.27%, respectively. The Kospi has now reached the highest level since May 8, and the exchange will be closed tomorrow (15th August) for holiday. The MSCI Emerging Markets Index advanced 0.7%, reaching a three-month high. 

In Europe, stock prices have been rising on the back of better-than-expected GDP reports. With German growth slowing less than forecast, European stocks built on the positive mood in Asia. Most European indices are up by about half of a percentage point. Meanwhile in the US, the S&P500 futures are up by 0.2%. 

In bondland, Treasuries are largely unchanged with 10-year yields modestly up to 1.67%. In Europe, bond yields have responded to the better-than-expected GDP data. In Spain, 10-year yields are down to 6.72%, while in Italy 10-year yields have receded to 5.83%. Conversely, German bund yields have risen to 1.42%. 

The dollar is trading marginally lower against a basket of major currencies, with the DXY index down only 0.1%. The euro is climbing for a second day, reflecting better news on German growth. On the commodities side, oil prices rose on speculation that inventories declined for a third week in the US. Brent prices climbed to more than $115 yesterday (13th August) after a US Navy ship collided with an oil tanker in the Persian Gulf. WTI is up by 0.2% to $91.2 a barrel while Brent prices are rising by 0.3%, to $113.9 a barrel. 

Euro area GDP reports out today confirmed that the region is mired in recession. The economy shrank by 0.2% during the second quarter, after stagnating in 1Q. German and French GDP, however, surprised on the upside. In Germany the economy picked up by 0.3%, while in France GDP stagnated for a third straight quarter. Meanwhile in Spain the economy shrank by 0.4%, and in Portugal GDP shrank by 1.2%. All in all, our European team expects euro area GDP to contract by 0.7% both this year and next. 

Also out this morning, the ZEW survey of investor confidence dropped further in August. Both the current situation assessment and investors' expectations fell. In the UK, CPI inflation rose from 2.4% to 2.6% in July, notably above market expectations. A changed seasonality of summer sales and higher air fares pushed inflation upwards last month. 

 

- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Tue, 08/14/2012 - 08:26 | 2703290 French Frog
French Frog's picture

"It is just getting stupid"

What do you mean "just"?

It's been stupid for a long time ... "stupid as stupid does"

Tue, 08/14/2012 - 08:35 | 2703303 malikai
malikai's picture

All this makes me think QE3 will be a sell event..

EDIT: Meanwhile, gold: http://www.quantsig.net/img/com_gold.png

Tue, 08/14/2012 - 08:36 | 2703319 SheepDog-One
SheepDog-One's picture

Yea it's been full retard for a LONG time!

Tue, 08/14/2012 - 08:22 | 2703291 zilverreiger
zilverreiger's picture

DONT PANIC

Tue, 08/14/2012 - 08:24 | 2703295 Waydown
Waydown's picture

The higher they fly...

Tue, 08/14/2012 - 08:24 | 2703296 spastic_colon
spastic_colon's picture

dont worry, good news will be good also

Tue, 08/14/2012 - 08:28 | 2703301 Jlmadyson
Jlmadyson's picture

There will be no warning. There will be no bell.

Tue, 08/14/2012 - 08:40 | 2703310 SheepDog-One
SheepDog-One's picture

Europe imploding, China stalled, every 'solution' already tried and failed several times over...SO yer sayin' theres a CHANCE! 

So you're saying there's a chance - YouTube

Tue, 08/14/2012 - 08:43 | 2703333 Brother Sebastian
Brother Sebastian's picture

It's just a bull trap.  This being OEX week, the bastards will take it down very soon.

Tue, 08/14/2012 - 08:56 | 2703350 slewie the pi-rat
slewie the pi-rat's picture

key words: "sentiment"; "news"

it is the running of the banksters bulls and bullshit @ pumplona

i think they are holding off taking a dumplona till the punchbowl is empty

can you freaking imagine the amount of booze and drugs heading into wyoming?  trainloads!

free pussy riot!

Tue, 08/14/2012 - 08:50 | 2703359 Orly
Orly's picture

Sell the yen crosses into oblivion.  Time for some payback!

:D

Tue, 08/14/2012 - 09:27 | 2703478 tomgilb
tomgilb's picture

QE3 hasn't been priced in, it's merely the hopeful irrational exhuberance that it will happen.  If QE3 does happen, the stupid market will power even higher.

Tue, 08/14/2012 - 10:01 | 2703591 kornholio
kornholio's picture

Bullish

Tue, 08/14/2012 - 11:04 | 2703776 vbone
vbone's picture

too many bears bros! levitating this market

Tue, 08/14/2012 - 12:28 | 2704052 spekulatn
spekulatn's picture

Speaking of hope and prayer, anyone BTFD on shares of AAPL after the REG last thumped his chest??

 

http://macromon.wordpress.com/2012/08/13/apple-a-chip-shot-from-an-all-t...

Do NOT follow this link or you will be banned from the site!