Is it possible that capitalism’s underlying focus on profits, and the necessity for endless purchases of goods and services, has a practical limit?
Despite the second (or third) dead cat bounce of the day in US equities (as machines pin the S&P to VWAP), US Treasury yields are collapsing-er to the lows of the day. While 30Y and 10Y yields are now down 10bps or so from earlier highs, the move in 2Y is most notable as it has broken below the 200-day moving average for the first time in 2 months... suggesting that no matter how assuredly The Fed says it will raise rates, the market sees Yellen cutting 'em back promptly.
Crude oil prices continue to push higher. Following the earlier drop in US crude production this week and PEMEX oil rig fire, we now have more substantive headlines from Switzerland:
*IRAN TAKES PAUSE IN TALKS, NO DOCUMENT SEEN TODAY: TASS CITES UNIDENTIFIED EUROPEAN DIPLOMAT
Of course, one wonders who really wants a deal now... with over-supply already a problem, any sanctions-lifting would boomerang back to US Shale firms and further destabilize the illusion of recovery in America.
"If you’re incompetent, you can’t know you’re incompetent. [...] the skills you need to produce a right answer are exactly the skills you need to recognize what a right answer is."
Following last night's pump'n'dump after API inventories exceeded expectations (5.2mm vs 4.2mm exp.), WTI crude prices have dropped to almost a $46 handle and recovered as chatter of "no deal" from Switzerland picks up. DOE reports a 4.766mm barrel build, greater than expected, for the 12th week in a row - the longest streak since records began in 1982. Crude prices are however surging as production dropped wekk-over-week for only the 2nd time this year...
A combination of Greek default fears rising (safety reach) and considerably weaker than expected data (moar easing) has sparked a $20 surge in gold prices this morning, back above $1200...
According to Citigroup, the revenues from trading fixed income securities has been decreasing since the end of the global financial crisis, but this trend might very well be reverted soon as investors are desperately trying to protect their assets from erosion.
US Manufacturing PMI beat expectations, printing 55.7 up from 55.3 prior to its highest since Oct 2014, once again flying in the face of the collapse in US hard-data-base macro. More in line with the underlying reality, Feb Construction Spending dropped for the 3rd month of the last 4 and March ISM Manufacturing tumbled to 51.5, missing expectations of 52.5, to its lowest since May 2013. Under the covers, it is even uglier with the lowest New Orders since Jan 2014 as US Manufacturing data has missed 5 of the last 7 months and dropped for 5 months in a row - which hasn't happened since 2008.
Update: GREECE GOVT DENIES PLAN TO DELAY APRIL 9 IMF PAYMENT: REUTERS
For now the algos can't decide if Greece is joking about making the payment or joking about not making the payment.
"The country seems to be on the verge of total collapse," the UN says, citing civilian deaths and children in "desperate need." Meanwhile, Saudi and Houthi troops are engaged in "heavy" border clashes as the coalition continues its bombing raids.
It's business as usual in Washington. President Obama has just signed another Executive Order declaring a National Emergency to deal with cyber threats:
*OBAMA ORDER CREATES NEW AUTHORITY TO RESPOND TO CYBER THREATS TO BE USED IN 'TARGETED MANNER'
*OBAMA ORDER ALLOWS SANCTIONS FOR CYBER THREATS
This new authority, yet another layer of government oversight, we are sure is for your own protection and in Obama's words will "augment work to fight cyber threats." All your internet is belong to us...
30Y yields are back below 2.50% - the lowest level since last Thursday's yield-ramp (following consecutive weak auctions) - as ADP data showed a lot less exuberant escape-velocity-ness than expected. The entire bond complex is seeing yields tumble post-ADP, extendionb the drop from the overnight session which did not bounce back like stocks...
Domestic energy production continues to increase despite the anticipated shale shakeout. The precipitous decline in gasoline prices were welcomed by most but government exise tax revenue was in jeopardy.