US Equity markets were on a mission today... all-time highs for the S&P and Dow were in sight, green for April for the S&P, and unchanged year-to-date for the Nasdaq and Russell was just over the horizon, but... a total divergence from JPY carry, bond yields, credit, and even VIX meant that a 'warning' from David Einhorn about Tech Bubble 2.0 was just enough to take the juice out of what was already a low volume levitation. It's a Tuesday so we closed green - the 6th up day in a row - longest run in 7 months. Biotechs ripped higher on M&A "get rich quick'"fever - biggest 2-day rise in 30 months. Treasuries were mixed with 30Y bond yields ripping lower and 5s30s dropping 4bps to 1.75% - new lows since 2007. Copper made modest gains on the day but gold, silver, and worst of all WTI crude all dropped on the day (WTI -2% to $102).
Trannies made new record highs... Nasdaq and Russell almost made it to unchanged for the year...
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S&P and The Dow broke to green for April...
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Squeeze...
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S&P sectors off last week's lows...
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Let's get a little context on those high-flying growth stocks... from Fed Tarullo's "valuations are stretched" comment
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Biotechs were bid as M&A "get rich quick" fever took hold (biggest 2-day rise in 30 months) - though short of its 100DMA
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But Bonds weren't buying it...
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VIX wasn't buying it...
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Credit wasn't buying it...
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and nor was JPY carry...
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The USD limped back from early strength (around the EU confidence, housing, Richmond Fed beats) to end the day unchanged on the week...with AUD strongest
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Oil tumbled back to $102. Gold and silver limped higher after the ubiquitous morning slamdown...
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The term structure continues to flatten
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As the appeal of 30Y Treasury yields appears strong no matter what growth, taper, normalization is priced into stocks
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One has to wonder if the Europeans have given up chasing Spanish and Italian bonds and are willing to rotate from credit risk to interest rate risk (from 10Y Spain to 30Y US) for an addtional few bps of yield...
Charts: Bloomberg