Stocks Soar As Santa Claus Rally Hopes Oust Omicron Fears
Goldman's Chris Hussey summed up today perfectly:
"US stocks are trading definitively higher... for no apparent reason."
Yesterday's VIXtermination continued today...
...and that lifted the US equity indices back into the green for the week, almost as if (well completely as if) Manchin never 'nein' to BBB. The Dow slipped back to unchanged from Friday late in the day but then a very last minute buying panic lifted everything with Small Caps and Nasdaq outperforming amid their gamma chaos...
Because, hey, everything is fine...
Stocks have oscillated between short-squeeze and unclench for 6 days now...
Source: Bloomberg
All the majors were ramped back above key technical levels...
Just bear in mind, today's ramp in stocks came against a hawkish background of rising rate-hike odds...
Source: Bloomberg
Interestingly, the market shifted its expectation for a reversal to rate-cuts between 2023 and 2025 hawkishly today...
Source: Bloomberg
Extremely strong 20Y auction coincided with a stop-run on longer-dated yields and sparked a solid bid but overall bonds were clubbed like a baby seal today with yields up 4-7bps across the curve (belly underperformed)...
Source: Bloomberg
The 20Y yield move shows the action best. Amid holiday week liquidity, a stop-run stalled by a mega string auction...
Source: Bloomberg
Notably, 2Y Yields are now higher post-Omicron and 30Y is ramping back towards unchanged...
Source: Bloomberg
The dollar trod water again in a narrow range...
Source: Bloomberg
The Turkish Lira extended gains today, though only by around 1 big figure... as opposed to the insane 6 handles yesterday)...
Source: Bloomberg
Cryptos ripped overnight, with Bitcoin back above $49,000, pulling away from its 200DMA...
Source: Bloomberg
Oil prices extended their rip higher with WTI topping $71.50...
European gas prices exploded to record highs today. They now trade at an unprecedented spread to US NatGas...
Source: Bloomberg
And for context are EU NatGas trades at an oil barrel equivalent price of over $350!!!
Source: Bloomberg
Finally, breadth still stinks...
Source: Bloomberg
