Yield Curve Crushed To 10 Year Lows As Stocks Signal Trump-Tax-Plan Won't Pass

The bond market's reaction to the Trump Tax Plan...

 

Bonds and Bullion were immediately bid and stocks and the dollar sank on the Trump Tax plan release - but as Europe closed, gold was 'managed' down, leaving bonds outperforming on the day... And stocks back to unchanged as the market realized there is little chance of this bill passing... (So Bonds price out a little more growth hope and stocks flat on status quo and Powell)

 

The immediate reaction in stocks to the release of the Trump Tax plan was disappointment - sending stocks lower and VIX higher - but that was quickly met by the machines crushing VIX back to a 9 handle...

 

And as it became clearer that this bill was a non-starter, stocks roared back...

 

Some of the bigger reactions to the Tax Bill were homebuilders...

 

And Private Equity shops (Apollo, KKR, KW)... though there did not appear to be anything in the tax bill

 

And TSLA kept falling (not helped by lower EV credits in the tax bill), tumbling back below $300...

 

Finally, Bank stocks outperformed the market... as the yield curve crashed...

 

High yield bonds did not love the tax plan...

 

Treasury yields were down across the board having fallen in the early European session then legged lower on the Trump Tax plan release...

 

10Y seems to bid in Europe...

 

With the 'growth'-related 5s30s curve slumping to new cycle lows...

 

Breaking down to new cycle lows - flattest since 2007...

 

The Dollar Index ended lower on the day but was whipsawed around quite a bit... like the other markets, FX seemed to signal no hope for the tax bill passing...

 

 

Crude rallied on the day but copper, silver, and gold ended unchanged after jumping on the tax plan...

 

 

The bottom line from the reaction by markets seems to be traders are not expecting this bill to pass at all... and bonds are signaling the recent reflation exuberance is now fading fast.

Comments

Clock Crasher Thu, 11/02/2017 - 16:05 Permalink

From Mac10's PonziWorld

Meanwhile on the topic of today's Fed meeting, below I mapped the 2017 Central Bank meetings against the S&P 500. The way CasinoNomics works is that you buy the S&P futures leveraged 10x two weeks ahead of the first monthly CB meeting. Then you sell when the last Central Bank meets for that month. HINT: That would be today for this month. Then you collect your 4,000% annualized return without a nickel of drawdown, rinse and repeat until next month. That's at least what Skynet does, I can't speak for anyone else. Of course a real shill holds the entire time and prays this isn't the time when the 50 day breaks...

https://ponziworld.blogspot.com/2017/11/prepare-for-meltdown.htmlchart image https://1.bp.blogspot.com/-1osXEoI24Yk/WfoVYubznzI/AAAAAAABYhQ/A1RZlS-a…

NDXTrader Thu, 11/02/2017 - 16:13 Permalink

Dow +80...ZH: "Stocks signal tax plan won't pass." Jeez, guys. What's more likely is that all of the goodies they took out will be put back in plus some more. Then it will be a big drama in between Christmas and New Year's finally passing by a Pence vote at 3 am. That's usually how they write the script

LawsofPhysics Thu, 11/02/2017 - 16:08 Permalink

Interest rates will rise and the central bankers will print even faster, in fact, they already are. When they said "uncharted water" they were serious."Full Faith and Credit"

John Law Lives Thu, 11/02/2017 - 16:12 Permalink

As of today's close, the DJIA has now rallied more than EIGHT THOUSAND FVCKING POINTS off the intraday lows of 15,503.01 on February 11, 2016.  I am sure that is perfectly reasonable...Fed_Fvcking_FUBAR_to_Hades

Keltner Channel Surf Thu, 11/02/2017 - 16:15 Permalink

Eclectic MixTape:   Track-of-the-DayWhy don't you do right, like some other men do?Get out of here and get me some money too(New York:  July 27, 1942)    https://www.youtube.com/watch?v=4zRwze8_SGkOne wonders how the PC crowd would view this today:  a creepy older gentleman, Mr. Goodman, checks out 21-yr-old Peggy Lee, quite lasciviously, shaking his tuckus, as she delivers the verses, with a lyric that dares to suggest women must depend on men for money, while periodically whipping out his phallic clarinet to blow the chorus into her microphone.Well, guess what – NO ONE CARES !   This is a timeless classic that will be enjoyed many hundreds of years hence, largely for the stylish solos of Benny Goodman and the understated (and underrated) vocal from Ms. Lee, precociously incorporating lessons learned from Billie Holiday re: tone/phrasing, albeit ‘smoothed’ a bit (e.g., not hanging out behind the beat quite so much).(Fun Fact:  The original version was quite different (!), recorded by the Harlem Hamfats in 1936 as "The Weed Smoker's Dream"https://www.youtube.com/watch?v=ijxFF2qQAjU  )

Traderone Keltner Channel Surf Thu, 11/02/2017 - 16:31 Permalink

I too suck at trading therefore I suggest we short it all, get married to our opinions because once we form an opinion it then becomes a fact therefore the market is wrong not us thus enabling us to comment here every evening informing all and sundry that the market is a 'stoopid freaking fraud' and will collapse one day due to those 'stoopid Joos' :)  oh, and buy gold .DEATH TO SOME FICTITIOUS CHARACTERS.

In reply to by Keltner Channel Surf

Keltner Channel Surf Traderone Thu, 11/02/2017 - 16:58 Permalink

Now you’ve done it.  After my nice, self-deprecating comment, you’ve intentionally tried to annoy the faithful here.  Shame on you.   (Aw, what the heck)DEATH TO SMALL TRADING RANGESDEATH TO DUMB TRICKS W/ LASERSDEATH TO MEAN NUNS WITH TASERSDEATH TO THOSE RESTAURANT PAGERSDEATH TO SLOW DIAPER-CHANGERSDEATH TO ALL PERSONAL TRAINERSDEATH TO SHARP NUTMEG GRATERSDEATH TO THE CARTRIDGE RAZORAnd finally, for the upcoming holidays:DEATH TO THE GIFT-EXCHANGERSDEATH TO CHEAP PLASTIC MANGERS

In reply to by Traderone

John Law Lives Thu, 11/02/2017 - 16:37 Permalink

Many public explanations over the past ~20 months re. "why" stocks are rallying have been based upon ad hoc reasoning.  Stocks started the current rally in February of 2016, and it wasn't because the "market" was pricing in a Trump victory and tax relief.  One day it will go down hard.  That day might be a bad day for a whole lot of people irrespective of whether they own stocks or not.  When elites fvck things up, many people often suffer.  Fed_FUBAR  

D.r. Funk John Law Lives Thu, 11/02/2017 - 22:30 Permalink

The inflection in Feb 16 was the hidden hand. Glaringly if you watched intraday that day. (like a 500 dow reversal, following what to that point, was an uninterfered cascading early Jan) Others described it that way too... not just conspiracy people. Meaning over-and-above detectable, a clear decision (by whoever the power division) on the multiweek drop#1 That moment itself heavily-corroborated a manipulating force under the indexes. Of course giving credence, but the notion that someone wasn't able to guide the indexes if they wanted/needed? Index programming was surmised very early on by me, 2013, probably others.#2 Time after time after time: corroborating observations and movements and circumstances and contexts (blah blah) persisted following 13 (lol) Just to enumerate.#3 Time after time (eyeroll but true) The movements followed political narratives. Was so obvious! Feb 16. Uh hello? election? Mid Feb 16 just around the time Dt actually broke through. A collapsing market would elect an insurgent? A steady market would elect Hrc?I chose to respond to you because it looks like you could actually absorb this with critical thinking and discussion. But it's amazingly obvious how many of you have missed the glaring narratives, cause-effects and market(index) control bullshit ! "ad hoc reasoning" Yeah it's obvious something is moving the indexes separate from headlines/reality (k? duh? no?) "wasnt pricing in trump victory and tax relief" Yeah, the so-called, trump rally doesn't comport to being so! (uh, obvious, amazing how many don't have critical thinking) Statements like the one you made, directly--corrorborate a paradox on trump rally-notion and those statements come up over and over and over. I said, it was fishy, within "days", of Nov 9 and magically 8 months 10 months 11 months later, statements of logic (like yours) highly suggestive of that. Buttresses and feedsback (on the strength) of my own assertion record

In reply to by John Law Lives

Tolomeo Thu, 11/02/2017 - 16:30 Permalink

Yes please, someone just shoot me too... WTF??? BIG news (no-news really) day... VIX MUST be killed!!! Still in AWE!!! Futures were pointing to an ugly open, till about 6am when the opened in the US and the fuckers went to work... Then the peace of shit tax plan that will not pass... And within the hour, VIX SMASHED to 9 handle!!! MFkers... It’s completely fuck you in the face manipulated (market!)...

Farqued Up Thu, 11/02/2017 - 16:40 Permalink

All of this is based on markets existing which we know they don’t. The Fed and their Euro henchmn control it all so this is theoretical jerking off.

Ajax-1 Thu, 11/02/2017 - 23:47 Permalink

I have never understood the addage of "Buy the Rumor" and "Sell the News". Case in point, the rumor is that Trumps proposed tax plan will not pass. Does this mean I should buy stocks? It sounds illogical to me.