Overnight Sentiment: Directionless

Tyler Durden's picture

In a market in which horrible data leads to upward stock spikes, what can one expect but a directionless market for now: after all today's biggest pending disappointment, the durable goods orders due out in an hour, has not hit the tape yet sending stocks soaring. Newsflow out of Europe is more of the same, summarized by the following BBG headline: 'MERKEL SAYS EURO BONDS ARE THE ‘WRONG WAY." We for one can't wait for the algos to read into this as more bullish than Eurobonds only over her dead body. Perhaps that explains why despite the constant barrage of abysmal economic data, capped by today's epic collapse in MBS mortgage applications plunging 7.1% or the most since March despite record low mortgage yields, futures are once again green. In summary: the usual Bizarro market which has by now driven out virtually everyone.

And in detail, from BofA:

Market action

Asian equity markets broke a four day losing streak as speculation rises that China will step up economic stimulus measures in the months ahead. That said the gains were limited by the fact that many see this week's EU summit as providing little or no concrete action on resolving the sovereign debt crisis. To read a full preview see the European Watch section below. 

The MSCI Asia Pacific index rose 0.8% overnight. The region's best performing market was the Hang Seng up 1.0%. The Japanese Nikkei was a close second up 0.8% and the Indian Sensex finished the day 0.4% higher. On the flip side, the Shanghai Composite fell 0.2% and the Korean Kospi finished flat.

In Europe, equities are trading 0.5% higher in the aggregate. The blue chips are outperforming up 0.6% while shares in Germany are lagging the broader market up only 0.2%. At home, futures are pointing to a small gain of 0.1% in the S&P 500 later today. 

In bondland, Treasuries are selling off modestly in the longer end of the curve. The five year yield is unchanged at 0.72% while the 10-year and long bond yields are up 1bp to 1.63% and 2.70%, respectively. In Europe, we continue to monitor Spain's 10-year yield which fell 3bp in early trading to 6.76% and the Italian 10-year which is down 7bp to 6.08%. 

The dollar is roughly unchanged in the currency markets. Commodity prices are slightly lower. WTI crude oil is down 21 cents to $79.15 a barrel and gold is off $3.83 an ounce to $1,569.10. 

Overseas data wrap-up

Spain's retail sales fell 4.9% yoy in May. That follows a 10.0% yoy drop in the prior month. Retail sales figures tend to be very volatile; however, that said we see consumer spending coming in very weak in Spain this year due to rising unemployment, weak wage growth and austerity measures that sap consumer's buying power

Comment viewing options

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

The authour just does not get it, IMHO.  Macro events and news do NOT drive the markets intraday or even day to day. They show where the next cliff may lie, but are not trade-able.  The human herd and its emotions drive the market, driven by big money sharks and wolves who know that the laggards, late crowd -weak hands all - like to hide among the pivots and trend lines, MACD and RSI readings on the charts. And, thet is where they come to feed.  That is what drives the market - the knowlege of the few about what the herd may do if spooked one way or the other.

malikai's picture

I wish the suckers the best of luck with that excellent way to become a hundredaire.

Also, TD, take it easy on the algos. They're just doing what they're programmed to do - rape and pillage.

Cursive's picture


Well, good for you.  You've described a rigged casino, which is what ZH has been preaching for years now.  Why don't you let us all know where the "market" a/k/a rigged casino is going next.  The highest form of hubris.  BTW, the house always wins.

ArkansasAngie's picture

Driven out the muppets only leaving the banksters, PPT and the gamblers

Who needs muppets when you can elevate the market without them

BBullionaire's picture

But if there's no muppets to fleece the predators will have to start to seriously cannabalise each other. Which would be...nice

TrainWreck1's picture

The mutual downgrade slugfest has already begun.


Cdad's picture

In summary: the usual Bizarro market which has by now driven out virtually everyone.

You couldn't have said anything more prescient, profound, or more true.  It is the problem.  It is the miscalculation by the Bernanke.  Capital formation is dead.  There are no new fund flows into markets.  There is only selling...and counter trend short squeezes generated by the algos.  The Terminators now own the market...and they can have it.  The Market no longer means anything.  

Way to go Bernanke...and fascists everywhere! 

Alejandrito's picture

Signals arriving from the U.S. economy also encouraged to be bullish


but Goldman said they were bearish,

signals confusing.

Duke of Con Dao's picture

and I say to Merkel:

"Mohawk that girl!"   (can you imagine that look? I fell vomitous..)


(classic scene from Scorsese's After Hours where our hapless hero gets Mohawked!)


slaughterer's picture

Smithers, where are the muppets?  We need somebody to fleece today besides our competitors. 

Zola's picture

Winston Churchill used to say: "Never has so much been owed by so many to so few". I think the appropriate sentence now is "Never has so much been stolen from so many by so few"

cowdiddly's picture

Alogo trades are now up to 84% of all trading. Um would the last one out please turn out the light.

RobotTrader's picture

Bears are running out of time.

malikai's picture

Running out of time for what? Shower? Latte? Another 'we-should-be-paying-for-it' bit of excellent investment advice from you?

Sudden Debt's picture

you seem to have a lot of it

crawldaddy's picture

Like gamblers on the titanic. It makes no sense to keep playing poker after you hit the iceberg, but its all these good for nothings know how to do.

localpacific's picture

merkel is the wrong way...... Markets Remain Steady After Merkel Remarks