The latest overnight meltup which has pushed the DJIA and S&P to new implied record opens has been driven by, what else, the falling Yen, which after tumbling to fresh new 5 year lows following the release of the BOJ minutes (which said nothing new), has sent both the Nikkei higher by 1%, to post-2008 highs of 16,174, while the S&P, up about 5 points just shy of 1840, and has only three trading days in which it should close the gap to the central banks' price target of 1900 as we first showed in April [12].
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In the absence of any actual newsflow (we now live in a world in which both good and bad news are P/E multiple beneficial, just continue keeping an eye on the EURJPY and the USDJPY - these are the only two signals tht matter for the market.
The other, far less relevant, overnight bulletin points are summarized by Bloomberg:
- Treasuries steady, with 10Y yields holding near YTD high seen in Sept.; trading quiet with U.K. closed for Boxing Day and before New Year’s holiday next week.
- The Turkish lira weakened to a record low vs USD after a third government minister resigned amid a corruption probe and urged Prime Minister Erdogan to do the same
- Shinzo Abe visited Yasukuni Shrine on Mao’s birthday, drawing a quick rebuke from China for paying respects at a site that memorializes war-dead including World War II criminals
- China estimates that growth slowed to 7.6% his year, with mounting challenges putting pressure on the nation’s traditional growth model of investment-led spending, according to Xinhua
- Thai police fired tear gas and rubber bullets at protesters trying to break into a Bangkok arena where political parties were registering for a snap election meant to ease months of unrest
- A homemade bomb exploded alongside a public bus near a Cairo campus, coming two days after a deadly attack on a Nile Delta police headquarters that prompted Egypt’s military- backed government to brand the Muslim Brotherhood a terrorist group
- The U.K. government is considering rule changes that would make it easier for new banks and alternative finance providers to provide funding to small and medium-sized companies
- From Maryland to Hawaii, Obamacare’s state-run enrollment operations are running into technical difficulties, creating new headaches for the White House even as the federal insurance website finds its footing
- Former NSA contractor Edward Snowden, in a Christmas message on a London television station, called government surveillance worse than anything envisioned by George Orwell in “1984”
- BofAML Corporate Master Index OAS narrows to new YTD low 129bps; $50b has priced this month. High Yield Master II OAS narrows 4bps to 396bps, new tight since 2007; nearly $21b priced in Dec. CDX High Yield closed at 108.48, third consecutive record, from 108.35; YTD low 101.03 (June 24)
- European sovereign markets closed. Nikkei gains, China stocks decline to four-month lows; U.S. equity-index futures rise. WTI crude little changed, copper and gold higher