With the White House increasing its rhetoric in the face of Russia/Syria headlines and growth-inspired commodities like copper and oil suffering, the meme of the day that today's rally was a combo Asian growth and Syrian 'ease' is bullshit. Simply out, it's just another day in paradise as we noted earlier the 'most-shorted' names in the US equity market were squeezed dramatically higher - the most in 15 months (+2.8%) [7]. Interestingly, as the Russell surged to highs of the day, the Dow and S&P diverged lower in the afternoon. Homebuilders were the best choice for this idiocy as they soared 5% from Friday's lows (even as WFC and BAC shut their mortgage departments?) and are now 2% above pre-Kerry levels. Carry-mongers were equity bulls best friends as EURJPY lifted stocks all day and the USD dumped - led by EUR and SEK). Gold and silver flatlined for most of the day along with copper with WTI dumping into the pit close to around $109 (still its highest for this date ever). Treasuries were bid 5bps (belly) to 2bps (long-end). Trannies remain the only major index below pre-Kerry levels. Hedgers were active also in the later afternoon as VIX pushed higher. War schmoar...
Un-be-liev-able really...
[8]
Stocks had a mind of their own today...
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and it seems that mind was USD-related...
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But we note there was some divergence between the Russell and the rest as we progressed into the close...
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As most sectors now trade above pre-Kerry warmongery levels...
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Commodities were relatively quiet - of course with the ubiquitous slamdown around the open this morning...
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But hedgers were active as VIX underperformed....
[14]
So stocks rallied on "growth" and "less war", Oil sold off on "less war" and no growth, Treasuries rallied on "moar war" and "less taper", gold and silver did nothing (so war premium and taper off still in there), and the USD dumped ("less war" and "taper on?") - riddle us that batman?
Charts: Bloomberg