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Overnight Sentiment: Teflon Centrally-Planned Markets Send Futures Green
Bad news is once again good news. Asia sells off on Monday's weaker profit news; the Bank of Spain says that the Spanish economy is expected to see a negative print in Q1 which if confirmed will ensure a fresh recession while the budget statistics released by the Spanish government yesterday showed further deterioration in its fiscal situation, per DB. The deficit for the first two months of the year was €20.7bn and this does not include state and regional governments’ budgets; lastly American housing slump accelerates as MBA mortgage applications drop for the 7th consecutive week with applications down 2.7%, on the back of a 4.6% decline in refi applications, the lowest since December 7. And futures are...green. Which is to be expected, since good news is good news, and bad news is, thanks to the Fed, and in this case uber-dove Rosengren, who said more stimulus is on the table, better news. It is now obvious that the Fed will not rest until the market is at fresh all time distorted, manipulated, nominal highs.
Full overnight summary from BofA below.
Market action
Overnight, equity markets sold off in Asia after Chinese companies posted weaker profits. The MSCI Asia Pacific index dropped 0.4%. Not surprisingly, looking at the individual equity markets we find that the worst performer was the Shanghai Composite, the epicenter of the disappointing news. The Hang
Seng finished 0.8% matching the decline in the Indian Sensex. The Japanese Nikkei fell 0.7% while the Korean Kospi finished 0.4% lower.
In Europe, equities are down 0.2% in the aggregate after the UK's fourth quarter growth rate was revised lower to show a 0.3% qoq contraction in the fourth quarter instead of the originally reported 0.2% contraction. Meanwhile, at home futures are pointing to a marginally higher open later today. The S&P 500 is set to open 0.1% higher partially offsetting yesterday's late in the afternoon drop that left the market down 0.3% on the day.
In the bond markets, Treasuries are selling off across the curve. The five, ten and thirty year issues are yielding 1bp more than yesterday's close. The 10-year yield is currently 2.20%. In Europe, the UK gilt is 2bp lower to 2.24% while the German bund is 1bp lower at 1.88%.
The dollar is basically flat against a basket of other major currencies while commodity prices are slightly lower. WTI crude oil is down 98 cents to $106.34 a barrel and gold is $1.15 an ounce lower to $1,679.72.
Overseas data wrap-up
Thailand's exports expanded 0.9% yoy in February following January's 6.0% yoy contraction in exports. The rise in export follows a turning in manufacturing production following the recent floods that had knocked out a significant portion of the country's manufacturing base. Looking ahead the country should continue to recover and our Asian economists expect exports to expand by 10% for the whole year.
The UK's fourth quarter growth rate was revised lower to show a 0.3% qoq contraction in the fourth quarter instead of the originally reported 0.2% contraction. Looking ahead our UK economist expects the country to bounce back this quarter and expand by 0.4% qoq. For the entire year the economy is expected to grow 0.6% as the recession in the euro area acts as a headwind to more robust growth.
Today's events
At 8:30 am, the main economic data report for the week will be released: durable good orders for February. Durable goods orders are expected to rise 4.0% MoM in February after a 3.7% decline in January. Boeing orders rose sharply over the month and we expect this to translate into a 30% increase in the nondefense aircraft orders component. Stripping out this component, along with the rest of transportation, we expect durable goods orders to rise 2.0%. Under our forecast, core capital goods orders rise 2.0% in February, partially offsetting the drop last month, leaving us on tracking 6.0% capital spending growth in the first quarter.
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Seems like Tylers is short stocks . There is no point trading on what were called fundamentals . The game thats in place is now - go long all in until someone blinks . Then be the first out . Brainless for sure - but its all about making money - not being clever.
About all you can hope for is a clean getaway......screw clever.
Rosengren said that oil prices are a threat to the economy, mainly as a result of Federal Reserve policy (let's just call it printing dollars), so therefore, the Fed will have to be more accommodative (print more dollars) as a result.
And there are still people who don't think we've tumbled down the rabbit hole.
1987
Stocks are slightly overpriced (have to really resist injecting scorn here):
"U.S. equities are at most only slightly expensive — despite having risen nearly 30% just since last October and more than doubled over the last three years."
http://www.marketwatch.com/story/stocks-only-slightly-expensive-2012-03-...
I'd put everything in NYSE:DXD if Ben wasn't hovering over the market in his helicopter.
What market!!
Only a fool can think he can trade against the Big Banks and thieves who use HFT and are supported by the Government. The Government is running one Big Casino and the game is rigged n their favor..
People who should be behind bars are running the show.
You can kiss your pension money away while they trade it away.
And your money in the banks which will conveniently disappear .
To the person who gave me a negative.
Please trade with more vigour and more money.
Also keep your money with JPM/Goldman/Citi etc
And Goodluck to you
"It is now obvious that the Fed will not rest until the market is at fresh all time distorted, manipulated, nominal highs."
Seems that has been the case sine 09. Central planning looks to be what we want as a voting public. That and no DOJ and SEC.
Bernake himself seems to have watched and learned from Billy Crystal when he performed on SNL as Fenando. Bernake seems to believe of this economy;
"It's not how you feel darling, it's how you look. And you look mahvelous!"
They can pump the market to the moon. I'm not playing in it. Fuck Off Bernanke! I'm stacking!
Cool, I'm all for it, in what is left of ponzi allocation leveraged überlong . Only wish is for corresponding move lower on gold. Green shoots bitches!
Low volume market melt up=everything normal, no problems. Price of gasoline goes up on decreasing demand=evil speculators manipulating markets. And the band played on.
I don't think I agree, I think it's about the manpilated markets and that the drop from here that will happen just won't be allowed to happen until the sand p hit a new weekly high. plus if you haven't figured it out yet you are almost never allowed to prof8it from buying into a short on a down day. that would make too much money for the retail investor
Really makes one wonder where Bernanke's Money is invested. If all of this Money printing is just to keep his personal investments up. Would be funny if he has printed 3 Trillon Dollars just to increase his portfolio by $200,000.
Also we all know that Nancy Pelosi's money is invested in Aapl. Maybe this is to curry favor with her.
DOW -43 yesterday. Futures +37 this am. LMAO, just let it die already. Looks like a bunch of rats on a sinking ship. What are they planning on doing? Have a 13000-13200 range for the rest of the year? I guess one could argue sideways consolidation in which the same bullshit applys........no news will bring it down but good news will push it up. I admit this is a good point for a selloff chartwise but now it's in the mainstream media. What else can they do? Hand social security to GS to put in the stock market(LMAO imagine how well that goes over? Don't think the Muppets have much faith in god based banks anymore) and hurry up and get Israel to buy our overpriced shit?
It's pretty bad when this is the most important thing in our entire civilization.
I really love the FED going to classrooms. That would be one class id get kicked out of. No doubt we're all gona get screwed over royal by these dumbasses while their lifestyle isn't affected one bit. Bastards.
"go long all in until someone blinks . Then be the first out"
Ten million panic striken overweight lethargic pencil whipped fund managers all rushing the 3'-0x6'-8" fire exit at the same time. Yea, cue the White Snake album, it will be like watching cooked ground beef coming out a sausage grinder.
The important question for the future of the country: Will it happen before or after the party conventions?
How many of these banks and hedge funds are going to risk an entire years worth of gains in the hope that the EU or Japan doesn't implode? Ben can't save them.
My (delusional) opinion:
There is no new money going in. No volume. They are going to hold this together for as long as possible because this is that last big run up - market is going to break. Ben needs Obama to win to keep his job. A 20% correction will not cost Obama the white house - but high food and gas prices will.
I am not sure Ben wants to keep his job as this situation deteriorates. Let a new patsy come in and face the wrath.
Ben's plan may just as likely be to ditch the beard, change his name to something-Smith and move to an island somewhere not near the U.S.
These people NEVER give up power until forced out one way or the other.
I think a lot of people here are missing the point. These pension obligations need to hit 5-8% marks and they can't do it with rates this low in corporates. So they now own the big dividend payers and large cap multi nationals and are trying to get that rate of return there. It is working spectacularly. Until it does not.
I think you have a valid point, but it doesn't explain the run up in the Russell 2000.
Many of the pensions are already in 'critical status' and now some of them have 20%+ unemployment. The math just isn't adding up.
Hardly anyone in the US is going to have paid retirement. Shitville is on the way.
I'm going on a limb here, But imho, The trap is set. The bull trap that is. It all looks way to perfect....
Went short SLV (Sorry metal heads) Went long the VIX, And short some tech stocks.
Wrong, Not for long. GL
I have this strange feeling that the Federal Reserve owns more or less the entire NYSE now.
from Big Picture's Quote of the day
to Tyley Durden
Most of the time common stocks are subject to irrational and excessive price fluctuations in both directions as the consequence of the ingrained tendency of most people to speculate or gamble... to give way to hope, fear and greed. —Benjamin Graham
one question, is it possible for computer-based records to be un-tamperable-with?
Good news = bullish
Bad news = bullish (it could be worse)
Neutral news = bullish (at least it's not bad)
The solution to everything is...
print more dollars!
"But if retail investors haven’t gotten back into equities, and corporate earnings have hit a wall, then why have stock prices continued to climb higher? It can’t all be Bernanke’s funny money, can it? No, there’s more to this than just the Fed. Bernanke’s had plenty of help from corporate bosses juicing share prices via stock buybacks. Trim Tabs Charles Biderman gives a rundown of what’s going on in a recent post on his blogsite: To repeat, the only source of new money with which to buy stock is coming from companies buying back many more shares then they are selling. However, that could be changing. While companies are continuing to buyback shares… there are some reasons to worry about that trend. First of all insider selling is surging. The rate of insider selling to buying went from a 5 to 1 ratio in January to a 14 to 1 ratio of insider selling to buying in February to 35 to 1 starting the second week of March."
http://www.counterpunch.org/2012/03/23/how-long-will-stock-prices-remain...