Dow 20k Disappoints For 10th Day Despite Market Optimism Surging Most Since Dot-Com Peak

Dow 20k is "inevitable", it's a "no brainer" according to the business news punditry...

Maybe just don't play...?

 

Volume was terrible...lowest Dec 27th volume in at least 10 years...

 

Before we start on today's disappointing miss of Dow 20k once again, we want to note that the level of equity market exuberance is almost unprecedented...

The last time Americans’ optimism about the stock market registered such a dramatic one-month surge was during the dot-com boom. As stocks reached a record, the share of households anticipating higher equity prices a year from now surged to 44.7 percent in December from 30.9 percent a month earlier, the biggest monthly advance since November 1998, the Conference Board’s report on consumer confidence showed Tuesday. The group’s overall measure of sentiment rose this month to the highest level since August 2001.

So with that said - let's look at today's failed ramp for Dow 20k...the 10th day in a row...

 

Nasdaq hit another new high, but note that the S&P (green) managed to squeeze to unchanged post-Fed before running out of steam...

 

Dow was today's laggard (barely able to stay green) as Nasdaq (record high above 5500) and Small Caps led...with an ugly close just when everyone hoped for the 330 Ramp...

 

Financials (red) and Tech (blue) were ripped higher at the open but faded for the rest...

 

VIX and Stocks fell together again today after the initial flurry until shortly after Europe closed...

 

Treasury yields rose across the complex and a weak 2Y auction sent the short-end notably higher (in yield) later in the day...

 

With 5Y yields dramatically underperforming since Trump...

Bloomberg notes that Treasury five-year notes are lagging behind surrounding maturities by the most since July 2015 as traders price in a more hawkish Federal Reserve and a pickup in economic growth. The underperformance is seen in the so-called butterfly-spread index, which measures how the five-year note is performing against the two- and 10-year Treasury by replicating a trade involving the three securities. A positive reading signals investors are more bearish on the middle of the three maturities, making it relatively cheap versus the others.

The USD Index rose again today but has generally been range-bound since the initial Fed reaction (in a very tight range)...

 

CAD weakness is notable post-xmas, and AUD strength yesterday has been erased...

 

Despite USD strength, commodities gained...

 

With WTI crude topping $54...

 

But notably, Gold also gained for the 2nd day in a row - spiking overnight as China opened (and Bitcoin was bid)...