The US equity market continues to boldly go where no other market is willing to go (Dow outperforming EuroStoxx by 850bps this year). European stocks and bonds (+30-45bps) are down notably on the week (and year in some cases); Treasury yields are 4-6bps lower on the week; the USD is up 0.6% (as EUR bleeds a little lower into tomorrow's ECB); and Gold is up 0.6% (oddly with the USD) on the week; but US equities are unchanged with Staples and Industrials holding gains on the week. Today saw credit markets and treasuries pushing notably risk-off as stocks oscillated around unch on the week - pushing to the day's highs into the close on the back of yet another vol-selling ramp. Equity volume was average and trade size was lower than average as cash S&P and Dow managed small gains and Nasdaq a small loss as AAPL gave back its 'buyback rumor' gains.
Treasuries and Credit notably more risk-off vs Stocks and Vol...
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leaving the S&P 500 unch for the week...
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though breadth was weak once again...
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but the USD is up for the week...
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and Gold is up on the week...
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and Treasury yields down for the week...
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as stocks certainly seem on their own from shortly after the European close once again today... as Capital Context [11] (@CapitalContext [12]) LLC's ETF SPY Arb model (left) indicates, today saw US equities notably more exuberant than the rest of the market capital structure and while CONTEXT (right) was more correlated - overall, risk-assets are less excited than US equities in general. The tactical asset allocation model remains market-neutral (based on credit's divergence).
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This inexorable rise in stocks to start the year is not unusual - though this is now the best in years...
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AND the most disconnected from other asset classes...(HY notably divergent from previous years)
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Source: Bloomberg and Capital Context
Bonus Chart: We've seen this disconnect before...
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Bonus Bonus Chart: In case you had any question as to this market's schizophrenia... a favorable ruling (via Flagstaff vs AGO) helped the ongoing MBIA vs BAC court battle smashed MBI's share price up over 15% - but BofA's also rose!! Teflon market...
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