As Rome Burns... Investors Dump Gold, Send US Equity Markets To Record Highs

Only one thing for today really...

 

You have to wonder "who" stepped in at the European open and panic-bid with both hands and feet for Euros and US and EU equities...? As one trader mocked earlier, Brexit took 3 days to recover its losses, Trump took 3 hours, and Italeave took 3 minutes...

 

EURUSD ripped 300 pips from overnight lows...

 

Notably, European stocks did fade...but even Italian stocks (ex banks) only dropped a little

 

And of course, the reach for safe-havens such as bonds and bullion was an utter waste of time...

 

Someone even panic bid Italian banks at the open!!!

 

On the day, US Equities rallied with The Dow at another record high... Small Caps exploded in a short squeeze for their best day in 3 weeks!

 

Massive shorrt squeeze at the open...

 

But The Market BROKE 3 Times...

  • FIRST - 0950ET: *NASDAQ HAS DECLARED SELF HELP AGAINST CHICAGO STOCK EXCHANGE
  • SECOND - 1316ET:*BATS OPTIONS: BATS EDGX OPTIONS EXCHANGE HAS DECLARED SELF-HELP
  • THIRD - 1448ET:*NASDAQ HAS DECLARED SELF HELP VS CHICAGO STOCK EXCHANGE

 

Bonds & Stocks followed one another broadly today...

 

Because why wouldn't you buy bank stocks - when the Italian banking system faces collapse with no backstop? (And oil stocks were up despite oil ending the day really ugly)

 

Bank stocks surged again (but credit crumbled)...

 

The long-end closed lower in yields (barely) as the short-end sold off in a turbulent day for bonds...

 

The yield curve flattened but bank stocks were bid...

 

The USD was notably weaker today led by EUR strength...

 

But we note that Yuan has now rallied for 8 straight days, recoupling with TSYs post-Election...

 

Crude prices jumped again to new cycle highs...

 

But...all those gains were puked after the NYMEX close...

 

Following the biggest USO (Oil ETF) fund outflow in 7 years on Friday (as investors "bail out" following the commodity curve's inversion)...

 

Finally we leave you with this...from Rhino Trading's Michael Block who offers the following perspecitve on why European stocks spiked the most since the Trump victory last month (largley a black swan event), courtesy of Barron's:

…[Apparently] the pattern of fading a potential crisis and then scrambling to cover and get long when everyone takes a breath and realizes that this time is not the apocalypse either still holds more than ever. I can’t justify any of this. The lesson investors and traders are getting is that everything is a buying opportunity and you need to not miss the boat. Brexit? Bullish. Trump winning the election? Bullish. Italy saying no to the referendum and the Prime Minister handing in his resignation? Bullish. Heck, all we need is a coup d’etat in India and the entire Belgian banking system to go kablooey and the S&P 500 will be at 3,000 by Christmas Eve.