Gold Hits Record High, Yields Hit Record Lows After Powell Promise-Fest

As one would expect, markets were dominated today by Powell's words with gold and stocks rising after the FOMC statement:

Powell initially promised The Fed will "do whatever it takes for as long as it takes" and stocks and gold spiked.

Everything was fine until Powell reiterated a statement on the pace of recovery slowing and everything reversed.

But then Powell promised to "adjust forward guidance and asset-buying if needed" and the market assumed that if the recovery is slowing that can only mean MOAR!!!!

And stocks rallied back to their highs with Small Caps dramatically outperforming (as The Dow lagged)...

Expectations were high.. and met for now... but watch the next few days...

“The market was operating under the assumption that the Fed will do whatever it has to do to support the market” and policy makers “didn’t disappoint on that front,” said Phil Toews, chief executive and lead portfolio manager of New York-based Toews Corp., which manages $1.9 billion.

“If markets falter over the coming months, the ability of the Fed to act as a put under the markets will be tested,” Toews said via email; "if markets begin to fall despite the Fed’s bond-buying power, it would be a tipping point that would be a huge sell indicator."

Despite the sudden spike on Powell's "slowing" comments, the Dollar ended lower on the day (the 8th down day of the last 9)...

Source: Bloomberg

Spot Gold spiked back up to record highs (Dec Futs near $2000)...

Source: Bloomberg

Treasuries were bid and are now all lower on the week led by the belly of the curve...

Source: Bloomberg

with 10Y Yield dropping back to its 2nd lowest yield close in history...

Source: Bloomberg

And 5Y yields tumbled to new record low...

Source: Bloomberg

And real rates plunged to record lows (-96bps)...

Source: Bloomberg

While stocks remain near record highs...

Source: Bloomberg

Cryptos were all higher on the day, extending the week's gains...

Source: Bloomberg

Gold surged as real yields tumbled...

Source: Bloomberg

Finally, it's all about fun-durr-mentals, right?

 

Source: Bloomberg

Oh and there's this...

Pretty much sums it all up really.