This page has been archived and commenting is disabled.
S&P 500 Closes At 1399.99
As if anyone needed another example of who is really running the show, the S&P 500 cash index (an index that tracks the weighted performance of 500 underlying and supposedly fundamentally idiosyncratic companies) closed at 1399.99 after breaching the almighty 1400 earlier in the afternoon. The Dow Industrials failed to close in the green for the month and Dow Transports notably diverged bearishly today as the afternoon's ramp-fest in equities - and notably nothing else - gave hope to hope-less. Between a weak/strong (you decide) jobless claims data, a dismal Kansas Fed (and Chicago NAI negative print) juxtaposed with what was 'supposedly' strong pending home sales (contracts not signings note), it seemed some early QE-hope spillover from Bernanke yesterday got us going (with gold outperforming) early on but as the US day-session began, stocks took off from their lows, stabilized into the European close, then re-accelerated - running stops to the early April non-farm-payroll print levels. Stocks reconnected with Gold's early run but this did not have the feel of a QE trade at all - the USD was flat all afternoon, volume was dismal, gold actually fell as stocks took off this afternoon, and Treasury yields rose and fell in a narrow range. In other words, there was not a concerted cross-asset class QE hope here - this was all stocks on their own - as they disconnected from our cross-capital structure and broad risk asset models as the afternoon wore on. Notably SPY implied vol is very close to crossing below its 20-day realized vol for the first time in almost five-months as VIX tested under 16% but couldn't maintain it into the close. The USD was lower close-to-close with AUD strength and JPY weakness most obvious as the US day session began with EUR relatively stable. Treasuries broadly remain lower in yield on the week with 7Y outperforming and 30Y basically unch. Copper was the best performing commodity today followed by Silver (though Ag remains down on the week) but Gold and Oil also benefited from USD's leaking. Discretionary, Energy, and Financials sectors outperformed on the day in stocks (with Materials weak - another non-QE sign) but it was the equity market's standalone bullishness that suggests this was more technical than a hope- or fundamental-based regime shift.
US equity indices remain lower still for the month. The Dow was green for the month for a while but lost it into the close and significantly diverged from Transports. The NASDAQ is playing catch up still but it is the perfection in the S&P 500 at 1399.99 that made our day. Long-live the algos...
VIX tested below 16% today but ended above it but we note that 3m SPY implied vol is getting very close to testing below its 20d realized vol - something we have not seen in almost 5 months...
And with a h/t to John Lohman, the following chart gives a sense for what happens when the VIX crosses below SPY's 20-day realized vol. (though we note average returns after this cross are negative - SPY drops - though median returns are not - the performance is skewed notably). Still interesting how 'cheap' vol has got again...
The equity rally this afternoon (as we noted earlier) seemed to be a run on stops at the pre-NFP close as opposed to any fundamental buying. As is clear below, the rest of the asset classes were dramatically unimpressed...
Judging how markets did relative to one another is tough but as the chart above shows, gold tended to outperform early and Treasuries ended near their best (lowest yields) of the day. While correlations broke-down this afternoon, the S&P 500 disconnected significantly from both the credit/rates/vol model (SPY vs HYG/TLT/VXX) on the left (below) and CONTEXT (the broad risk-asset proxy for equity risk sentiment) on the right below...
and on a longer-term basis, CONTEXT has once again turned down in the same range as stocks have diverged - will this time be different? QE will tend to break correlations and so perhaps that is what we saw today but the correlations we would expect as QE was traded did not appear...
Charts: Bloomberg
»
- 5998 reads
- Printer-friendly version
- Send to friend
- advertisements -
robot trader must be very happy.
"happy" implies emotion and stable brain functions.
Look at AMZN. Beat with 28c vs 7c forecast, but are at B/E for all intents and purposes. Still forecasting B/E next quarter too, midpoint of sales range is below estimates.
Stock is up over 10% AH and going straight up in a buying frenzy. Must have been deeply oversold at 100x forward earnings. Thanks Ben Bernanke, this is how you create an efficient market?
Zee ztabeeleeeteeeeeeee. Hey its all good as long as all the sea of money Bernank has piled in goes straight into powering yet another insane stock bubble...cant ever have even .5% down though, that would be a 'crisis'.
-NasdaqGS
195.99 1.57(0.81%) 4:00PM EDT|After Hours: 220.46 24.47 (12.49%) 5
Bullshit
All the trillions Bernankenstein is shoving in under the table needs to go SOMEWHERE! Why not another ridiculous kinda-techish stock bubble?
Where's Prince for a good round of "1999" when you need him?
S&P 1399 is so 1999.
lol
SPAIN downgrade.. smacked the ES - http://hedge.ly/JdsV7w
All about just desperately trying to get thru today to live another day where they hope retail will pile in so they can be scalped.
Yes, it's a thin overbought market end mth book closing and greedy trades galore. Bernanke just ensured Wall Street will close the month in the black.
The sell off should be brutal, just timing is hard since the market jawboning is going in overdrive. Theory? Well I think that the ECB/IMF/Fed are all sh*tting their panties (silently) over the derivative sh*storm coming. Merkel hinted re: derivative wipe-out concerns with one of her garbled speech she gave recently.
Deja Vu
Forgetting amazon for a second...Is it possible that many companies are actually making a profit from the existing middle class (what's left) and the upper class as well as the lower income earner's being subsidized by all different programs (ebt)? I am as skeptical as the next guy but it seems that between cutting staff to the bone and the other stuff I mentioned it does not seem impossible that these companies may be making money. I am not saying it's fair, I am just saying that to call BS on every earnings report which goes on all the time here seems a bit naive.
I don't doubt they are making money. However, that leaves two questions: can they continue to make money and if so, what is the price to earnings multiple reasonable given risks to future profits. Neither of these two quetions can be answered just by looking at the companied projected earnings. To do so assumes every company is an expert on global economic risks. Given how massive the risks are I woulld bet the vast majority are underestimating the global risks for the latter half of this year (European debt crisis, china's economic conditions, japans debt to GDP, debt ceiling debates, etc). As a result I think their earnings estimates are probably high and they should not be trading as high as they are.
I agree with that, and I don't treat every sector equally. If you take for example agriculture or energy, throw in biotech. Hell throw in telecom in the emerging markets. Are thse not reasonable places to have a few dollars stashed for someone who is not inclined to have cash or be 100% in PM?
My job is to automate 100 people out of a job per year. There are millions of me. Guess my profession?
uhhmmm...oh, I know!
CNBC "Market Masters"
Are any of your millions of colleagues trying to automate you out of a job?
Amazon makes .28 cents, the markets go all head over heels ga-ga, and the stock ramps $25 to $220.
.28 cents.
Prosperity is only a joystick away!
It's stupifying, to me, that there are actual shit-for-brains people out there that can either admit it or accept it that this is rigged pile of shit.
So...Why not study the charts...Observe what's happening..Quit tilting at windmills...And make some $$$..?? I thought that was the intention of investing...Not just 'being right'...
Be safe all..
Not bad. I give it a 6.
Yes, the racketeers are running the show. Bernanke is punishing sound money and the economy is getting nothing in return.
The Bernank Devaluation
It just means it now takes $1.39 in Bernanke Bucks to buy what a $1.00 in Bernanke Bucks bought 1 year ago...
All just bullshit, theyre desperately pumping a bubble trying to get sucker retail onboard before they pull the rug out and scalp em.
The market has been in distribution for weeks. The decline is coming. Todays surge was more computer games. Grrr.
anyone else notice the huge volume sell off here after hours?....no news on MSM about anyone 'missing' ....pre gdp revision leak?
When you say "the market" you are okay with lumping in a Pfizer and Kinder Morgan energy with Zynga and Amazon? I think even Kyle Bass would think a lot of people on here are clueless.
http://www.youtube.com/watch?v=jF-CkMpQtlY&feature=related
i think that recent dip should have been bought...if one was inclined to play silly games. I am not, ergo did not
...which reminds me of a joke: Rene descartes is wandering past a tavern and the host calls out "Rene, come in for a drink". Rene considers the offer and then replies "I think not"...and he disappears!!!
hahaha...
"All right, then, I'll go to hell."
Mark Twain
"A civilization which leaves so large a number of its participants unsatisfied and drives them into revolt neither has nor deserves the prospect of a lasting existence."
Sigmund Freud
Descartes Blues:
"Don't need proof of my existence, I drink therefore I am. . . "
Great honky tonk song I penned a few years back.
The location of the circles here fits with my thoughts also (seasonality)
http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2...
We broke out pretty decent today. World reaction to the Spain downgrade is key, but really guys, is the downgrade a surprise to anyone? The EU potentially re-entering recession is obviously a headwind to keep an eye on. For now lets anticipate riding this higher (if we do not see massive mayhem in foreign markets tomorrow). If world markets tank big time, we should drop hard manana, third time will be a charm me thinks, Katy bar the door, we will eventually test then break through 1360 heading south (not all tomorrow BTW) and all hell breaks lose. DXY surges, etc. Thats how I am playing it. Tomorrow is a big day.
Don't anticipate a repeat of last year at all, economy running pretty decent right now. If we can get a correction to 1280 i'm going all in long.
I will have some to sell you @ 1280.
you got to play to win mother fucker... got to love this... the collapse is going to be epic...
you know it's T- minus whatever (post election? maybe before Obama is crowned emperor or sometime shortly after); t- minus = soon to the bubble bursting, you know it’s on-- when the main stream media just hypes the shit out of this melt up... the same ol’ same = junk bound bubble, tech bubble, real-estate bubble, and whatever the fuck is going on now (world wide fiat/ credit/ derivative/ i-phone app/ google goggles/ social zuckerberg bubble)… this time it’s different bitchez… enjoy yo self…
expect it, when you least expect it…
You want to trade and fool around, go ahead. You want to invest? stay away.
Yup - trade it.
I say stocks did not fall because there is hope Hollande may win in France and a new chapter in the EU/ECB relationship may be written. Why do I say this? Because the Euro, since Hollande spoke on Wed abt a growth pact went up and remained above 1.32, even after Spain's downgrade.