Stocks, Yield Curve Slammed After China Hike, Draghi Taper, & Tax Tumult

Did Senators Lee and Rubio (and Hatch) just go full "Leeroy Jenkins"?

 

A surprise China rate hike (and disappointing retail sales) sparked weakness in Chinese stocks...

 

Mario Draghi managed to talk the Euro and Bund yields lower (despite attemptting to raise inflation forecasts)...

 

Since the FOMC meeting, Bonds and Bullion are well bid as stocks and the dollar sink...

 

US equity indices were all lower on the day, despite valiant attempt at a late day rally... Small Caps were worst followed by Trannies...

 

VIX was up today as stocks ank (VIX closed above 10!)

 

But we note the correlation between stocks and VIX remains extreme...

 

 

 

High Tax companies underperformed once again...

 

Along the same lines, value factor has notably underperformed the last few days as tax hope fades...

 

And financials have suddenly started to weaken in the last two days...

 

Treasury yields were mixed today with the long-end dramatically outperforming

 

Sending 2s30s tumbling 5bps back below 90bps... This is the biggest percentage drop in the yield curve since Brexit and the lowest close print for 2s30s since Oct 2007...

 

 

 

The Dollar briefly rebounded early on Draghi but faded after Lee and Rubio...

 

AUD is the strongest major on the week after good jobs data...

 

Copper continued to rebound (and WTI popped today after overnight weakness), PMs remain green on the week...

 

In the cryptospace - Litecoin was sold, Ripple was heavily bid, Bitcoin Cash and Bitcoin Gold were up notably with Bitcoin and Ethereum marginally higher. The Bitcoin futures-cash spread compressed some more as an increasing number of brokers allowed shorts...

 

Gold and Bitcoin refound their correlation today...

 

Finally, we note the S&P 500 is at the intersection of a numerologist's nightmare... 

The next multiple of 666 is right there!

h/t Brad Wishak

Comments

Hammer823 Thu, 12/14/2017 - 16:03 Permalink

After gapping up at the open, Crash Program #3 was run today.To give you an idea of how underfunded both public and private pensions are, consider this:The DJIA closed out 1999 at 11,500.  Using the typical 8% annual return pensions are based on, the DJIA should be at 46,000 today for them to meet their equity obligations.  The S&P 500 was 1,469 at the end of 1999.  It should be 5,870 today. But they aren’t anywhere close to those levels.  The DJIA is over 21,000 points short.  The S&P 500 is 2,200 short.  They are half of what they need to be, even after 8 straight years of Quantitative Rigging.The shortfall is exponential as the years go by.  The DJIA will have to reach 85,000 by 2025, based on an annual 8% return since 1999.Keep in mind, pension plans are required to invest conservatively, with a good majority of investments in interest baring accounts that have earned next to nothing for the last decade.Now you see why bad news not only hasn’t had any negative effect on the market, but has actually been turned into a reason to rally.  It’s out of necessity.What do you think would happen to pensions if we have another downturn?  They simply can’t afford it. Trade accordingly. 

D.r. Funk Hammer823 Thu, 12/14/2017 - 16:32 Permalink

moronic to assume it can go up forever, or the cannibalizing vix can be-pushed-down forever, it's merely getting closer to that convergence point of dislocation and dysfunctionHow people can still argue that the system requires 600 s&p points per year or equivalent to sustain itself, and that's what's being done behind the scenes to keep everyone so happyis beyond unreal 

In reply to by Hammer823

Keltner Channel Surf Thu, 12/14/2017 - 16:04 Permalink

"Bullard Trading SPY & DIA-monds"      from  "Lucy in the Sky with Diamonds"     by  The BeatlesPicture yourself on the Niagara River, in barrels like sardines, with the big Falls in sightSomebody dropped rates, she’ll raise them quite slowly, a gal spouting Keynesian lines‘Sell in May’ candles of Yellen green towering over your headLook for the guy with QE on his mind, and he’s goneBullard’s buying SPY & DIA-monds, Bullard bought some SPY & DIA-monds   Aaaaahhhhh...Follow him down to a Starbucks in Ladue, where powerhouse people eat blueberry pieNotice his smirk as he walks past ‘bucks’ stock price, that’s grown so incredibly highNewspaper lackeys are cheering for more, waiting for retail to playClimb in the barrel, tuck your head in your knees and you’re goneBullard's gobbling SPY & DIA-monds, Bullard bought more SPY & DIA-monds   Aaaaahhhhh...Picture yourself near a big top formation, with unforeseen torpor, Fed forecasts revisedStubbornly, someone adds grains to the sand pile, the gal with big Keynesian eyesBullard’s dumping SPY & DIA-monds, Bullard sold his SPY & DIA-monds  Aaaaahhhhh...arrrrgh

Keltner Channel Surf John Law Lives Thu, 12/14/2017 - 16:27 Permalink

John Law?  Are you a Scotsman?  If so, I’d pay plummeting American dollars just to hear you talk (like football announcers who say “he KNOWS he should’ve done better” when a striker misses a tap-in.) Someday, a sociologist will do a study on why Midwest Americans go gaga over Scottish accents.  I assume it’s because they’re opposites, extremely expressive vs. bland …

In reply to by John Law Lives

Automatic Choke Keltner Channel Surf Thu, 12/14/2017 - 16:55 Permalink

I, sir, have never endorsed string theory.   To quote wiser minds than I, it is so bad it isn't even wrong.   It may yet prove to be the demise of physics as a profession....pulling young impressionable idiots into never never land where they masturbate over untestable and useless conjectures.   I do theory, but I am primarily an experimentalist.   I design and build shit that works.As for recreational pharmaceuticals, sigh, that is long in my past.   I pretty much only indulge in expensive whisky these days. 

In reply to by Keltner Channel Surf

Keltner Channel Surf Automatic Choke Thu, 12/14/2017 - 17:03 Permalink

Yes, just messing with you.  Seems they’re trying to make ‘reality’ match the equations, rather than the reverse.Still, the fact that Bernanke’s head closely resembles a Calabi–Yau manifold  (http://d2r5da613aq50s.cloudfront.net/wp-content/uploads/315349.image0.j… ) gives some hope that, like his QE theory, we can maintain ‘inflation’ in the universe indefinitely …

In reply to by Automatic Choke

D.r. Funk Thu, 12/14/2017 - 16:51 Permalink

All of those cheering, or touting, or even lauding the index-ascent manipulation, do you not think our stock market is, or sits as being, weaponized?Do you not consider for a second that at the obvious overbleeding, perpetually-foisted steeper, overbloated level, ‘could be’ weaponized?Obviously i said in a couple stages, 6-9 months ago, and 2 years ago, that it’s Easily arguable the susceptibility of the height was weaponizable if not intentionally being produced as suchYet you stupid dumb fuck populace, ha, ha, just sit there and watch it go up and develop and place itself in a manner that certainly could contain, that exact scenario. Oh b f d right?The direct control of the primary indexes was clear 4+ years ago. (You fuckin shadow gov proxy programmers aren't fooling some of us, Like i 'really need' to remind you of that) The created-conditions didn't just happen (duh) the indexes didn't just 'go' there, they've been moved there, As some of us have tracked and called out week after week in Direct Divulgence Of The Bullshit==SUB 11 VIX fabricated forced operation==3% DRAWDOWN LAPSE closer to reaching point of elimination==ADDITIONAL FORGED LEG not gonna convince me [it] can go forever==PROGRAMMED ATH PSYOP ' cant go forever '

adr Thu, 12/14/2017 - 16:54 Permalink

Ripple fans high fiving themselves on the forums. Two week sago they thought their cryptocoin was dead, but today it shoots up 81%. Like rooting for your favorite sports team they loved seeing Ripple climb the market cap chart and take out Bitcoin Cash. The bet is that Ripple takes out Ethereum tomorrow.Is there a real catalyst for the move?Clicking through the XRP web is insane as you see exchange funds moving billions of dollars around different cryptos. Someone moved a few billion in and out of XRP. Probably the reason for the spike. It looks like whales moving markets to their advantage and pumping and dumping different cryptos at will.Someone also moved close to $1 billion USD into XRP and then moved it to CAD. Only a massive exchange could do that, a little trader couldn't move a billion dollars out of an exchange to save his life.This space is dirtier than Hillary Clinton's snatch.

BetterRalph Thu, 12/14/2017 - 22:39 Permalink

With RUSS 2K @ it's good ol boys pumped number I say gold should be $1800 right now. But gold ain't 1800.
I watch RUSS 2K vs GOLD for many years. (I know pointless but it's what I watched) I watched as RUSS 2K goes up then gold gets the smack down. Some people say Real gold is 300:1 I don't know how many times it's been smacked down, but it is. So unless there's some secret stash of gold out there one day a golden freight train is going to be parked down a FIAT dirt road.