Why did the market go up? The same reason Bruce Jenner is now a woman... why not? (oh and Media Coverage)
The USDollar Index perhaps shows today's market events best...
- 0700ET Early rumors of an imminent Greek deal sparked EUR buying, USD selling...
- 0845ET US PMI missed and dropped to Jan lows (USD weaker... pushes off rate hikes)
- 1000ET Construction Spending surges (USD spikes... rate hikes coming soon)
- 1417ET *DRAGHI, MERKEL AND HOLLANDE SAID TO DISCUSS GREECE TONIGHT (EUR up, USD down)
So - just remember, this is all priced in (as today's market action showed)
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Stocks limped higher overnight on China strength (and despite missed PMI expectations in Europe)... ramped vertically on Greece rumors, stalled on denials, then plunged on 'good' data... but ince Europe had closed it was off to the races until Carl Icahn spoke at around 1445ET - *ICAHN TELLS FBN HE HAS CONCERNS ABOUT STOCK MARKET, IT'S TIME FOR FED TO 'STOP THE MEDICINE'
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Futures show the volatility intraday...
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The S&P 500 (cash) has oscillated up and down making lower highs since last week's tumble...
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A gentle reminder about 'bubbles'...
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Trannies were inspired...melting up to fill the Friday gap down open and flip-flopping once again with respect to oil price moves...
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Treasury yields increased notably on both "good' data and the pending issuance of a 100Y Petrobras bond (which would have demanded much of an illiqud market for rate locks) especially given chatter of a $10 bn order book!! *PETROBRAS $2.5B 100Y BONDS LAUNCH AT 8.45%
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NOTE: Once the bond was issued, TSYs rallied and stocks dumped
As an aside - a zero-coupon 100 year bond issued at a yield of 8.45% implies a price of around 2.54c... so $2.5bn face means Petrobras actually raised $63.6 million cash (which will accrue to a $2.56bn cost in 100 years).
The Dollar was all about EUR once again today... (ahead of Wednesday's ECB bollocks)
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Across the commodity space there was plenty of volatility but by the close, everything was practically unch (despite USD strength)...
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Gold and Silver were smashed higher in the pre-open, running stops over $1200 and $17 respectively, only to roundtrip perfectly as the dollar surged...
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To summarize the day: "good" headline data sparks weakness in stocks but they are bid by the machines on the back ofg 10Y weakness driven by rate-lock buying due to the issuance of 'idiot-maker' bonds by the world's largest insolvent energy company.
Charts: Bloomberg
Bonus Chart: What exactly do investors think will happen when this kind of volatility is added to the MSCI index next week? (Spoiler Alert - fixed risk budgets will mean reduced exposure NOT increased)
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