Another POMO, another dip bought, another all-time high in the S&P 500 but we are sure there is some disappointment that the '1600' caps have to go back in the closet for one more day. The S&P's best day in over a week was greeted with an almost perfect 'unchanged' for Treasuries and while stocks went out near their highs, Treasuries closed at the low yields of the day (2-3bps lower than the highs). Of course, the 'most shorted' names were smashed higher (at the open and at 1515ET) providing today's ammo. The USD started weak but Draghi's -ve rates comment sparked a USD surge (up 0.3% on the week) but stocks didn't care. WTI jumped back above $94 with its best day in six months (though little talk from the 'heads' of the removal of the implicit tax?). Gold and Silver also jumped (as did Copper) all ending the day up around 0.75%. Homebuilders banged over 2% higher on the day (as Lumber was limit down at 5 month lows) and while the Dow and S&P closed the previous all-time high, the Trannies remain -1.4% from Tuesday's close.
Stocks recovered yesterday losses very quickly and then went generally sideways on low volume post the European close today (though did make new highs in the meantime)...
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WTI Crude saw its biggest jump in six months... closing back at $94
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Shorts were trampled at the open and at the 315ET mark...
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which dragged the S&P and Dow up to their highs... but not the Trannies...
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But sectors tell a different story...
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The last time the S&P closed here (Tuesday), 10Y yields were 6bps higher...
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and AUDJPY (all JPY carry) disconnected all afternoon...
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and US equities totally dislocated from global risk assets today once the US day session opened... (the green line is Capital Context's CONTEXT model [13] - a proxy for cross-asset class risk)
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Charts: Bloomberg and Capital Context
Bonus Chart: The last time Consumer Staples stocks were so highly correlated to US Treasuries - bad things happened...
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Bonus Bonus Chart: What have global high-quality bonds known for the last 3 months that stocks didn't?
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Bonus Bonus Chart: but then again, it's been a good run since the March 2009 lows for all global bonds...
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