BTFTWD Continues... But Bonds Ain't Buying It!

Trade Wars, Schmade Wars...

 

While China had suffered more heading into the actual trade war, it has outperformed US since...

 

Futures show the dip-buying exuberance from the moment Trump announced the trade war and china responded...

 

And Cash markets, helped by a supposed 'Goldilocks' payrolls print haven't looked back...

 

The Dow blew past its 50- and 100DMAs back to try and fill the June 18th gap...

 

The S&P is following a very familiar path...

As Bloomberg reports, so far the recovery path of the S&P 500 following the selloff that started in January looks remarkably similar to the average path following the previous four corrections since 2010, despite the fact we are in the midst of a trade war. If it continues, the S&P would reach a new high by the second week of August.

 

Today's opening ramp was yet another major short-squeeze... but it ran out of ammo quickly...

 

Twitter was a roller-coaster as deleting 70 million fake accounts sparked selling but a modest bounce hit when Dorsey claimed that the removed accounts were not in their MAUs...

 

A Trump tweet sparked a brief panic in biotech stocks...

 

and sent Pfizer and The Dow lower before dip-buyers came scrambling back...

 

Treasury yields were higher on the day...

 

But remain largely unimpressed by equity's exuberance at the trade war...

 

The yield curve erased the post-payrolls drop today with 2s30s limping back above 40bps...

 

The dollar rebounded during the day, erasing overnight weakness for the first positive close in 5 days. NOTE that the dollar filled the gap from Payrolls on Friday then started to fade...

 

Cable was volatile in the last 24 hours as traders tried to game out the potential softness or hardness of the eventual brexit as May's government collapses around her...

 

EM FX extended its rebound today, back to 4-week highs...

 

The Turkish Lira tumbled as Erdogan announced decrees removing restrictions on his pick for CBRT governor and announced his son-in-law as finance minister...

 

Cryptos faded on the day, but Bitcoin, Bitcoin Cash, and Ethereum remain green from Friday's close...

 

While the dollar managed a small gain, all major commodities managed gains on the day...Copper was best on the day...

 

Finally, we note that there’s a growing divide among gold investors in the U.S. and U.K. as investors assess British Prime Minister Theresa May’s struggles to gain support for her Brexit plan. Holdings in the BlackRock iShares Physical Gold ETC -- listed in London -- climbed on Friday to the highest since its inception in 2011, while those in New York-listed iShares Gold Trust continued to slip as rising borrowing costs curb the appeal of non-interest-bearing assets.

Comments

Solosides Mon, 07/09/2018 - 16:01 Permalink

*This is a Certified Investment Watch Blog Spam Free First Post*

 

Today's ZH market wrap up translated to real world language:

"While a couple of blood drinking pedophiles siphoned billions off of the real economy, the average wageslave scurried like a rat trying to find some sort of "gain" in this rigged casino called a market"

Hope this helps the mentally disabled readers who only know how to focus on stock price.

james diamond squid Solosides Mon, 07/09/2018 - 16:25 Permalink

things that have goosed stocks:

consistent lowering of corporate tax rates over time

consistent increased use of tax loopholes over time

taxing dividends as capital gains

lower and lower interest rates  (primarily engineered by the fed)

      ZIRP for a decade

      quantitative easing  (buying the long end of the curve, primarily)

abandonment of the use of accounting principles

increasing corporate share buybacks

allowing corporations to increasingly reduce employee benefits over time

the wage earner being helpless to fight for adequate cost of living wage increases

2008 massive bail outs--the fed put--plunge protection 

non verbal assumption that congress is "all in" to keep asset prices elevated

401K valuations to sway workers not to demand wage/benefit increases

 

 

 

 

 

In reply to by Solosides

Ski Daddy Mon, 07/09/2018 - 16:06 Permalink

I don't even fight it anymore:

- Commodity Channel Index is heading upwards - check
- No macroeconomic news headlines - check
- No negative tweets by the Don - check

Bought up SPY Calls nice and early after the initial dip. Strategy works until it doesn't.

oliviaemma705 Ski Daddy Mon, 07/09/2018 - 16:08 Permalink

 

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In reply to by Ski Daddy

Number 9 Mon, 07/09/2018 - 16:20 Permalink

4 dollar gas is the killer.. at least it was last time and probably will be again..

watching those poor folks squirm as they dumped 100 bux in their SUVs was not as much fun as I anticipated. 

adr Mon, 07/09/2018 - 16:26 Permalink

Well thanks to Uber and Google and fucking electric scooter rental thing is worth $1.1 billion.

Where do these valuations come from?

When I was traveling I noticed a few of the stupid Lime scooters laying around on the grass. They are technically "dockless" which means you don't have to return them. Rent through the app and find one near you, whiz around until the battery dies and then hop off.

The company has to spend more money than it makes paying people to go around picking up the scooters that are discarded everywhere.

BUT THIS IS THE NEW NORMAL WHERE PROFIT DOESN'T MATTER, BUSINESS PLANS DON'T MATTER, NOTHING MATTERS!!!!

As long as a megacap thinks you're useful, BILLIONS IN YOUR POCKET!!!!

 

To think you used to actually need to make money to make money.

 

Arrow4Truth adr Mon, 07/09/2018 - 19:14 Permalink

Forgive me, but whenever I read or hear another talking about "making money" I visualize a little zionist gremlin "making" fiat... Santa's elves running printing presses "making" money, or an e-vil witch with a pointy hat stirring a cauldron saying "bubble, bubble, toil and trouble". Similar to one going to a bank and getting a loan... "making money", or making a deposit and then the bank "makes money" by loaning 90% of the value of the deposit. Just too fucked-up.

In reply to by adr

doc333 Mon, 07/09/2018 - 16:35 Permalink

I've been on here for several years and frankly, the DOOM, SKY IS FALLING crap is getting old, much like Gartman's market calls. There may come a time when the sky will fall, but it ain't now. Have fun shorts :o)

MrNoItAll Mon, 07/09/2018 - 17:27 Permalink

Dip buyers my ass. That is corporate buybacks ramping up the indexes. Why do they do it? Because they can, because the entire world is floating in a bathtub filled with debt, and they aren't ready to pull the plug just yet.

D.r. Funk MrNoItAll Mon, 07/09/2018 - 17:55 Permalink

Well it's the aggregate of or into the central programming on the indexes. The patterns today, or the highly predominant percentage over time, are wayyy too homogeneous (and recurring) to be just zirp-buybacks. And of course btw, this was identified and then demonstrated and affirmed ad nauseum to-an-eyeroll-degree, 3 yrs ago, 4 yrs ago. Not a criticism just a massively-fortifying aiding

In reply to by MrNoItAll

Roger Ramjet Mon, 07/09/2018 - 18:01 Permalink

Hells bells!  Apparently tariffs are great for the market/economy.  Both China and US markets on a tear.  Why didn't we think of this years ago?  Could we have more please!

Let it Go Mon, 07/09/2018 - 19:35 Permalink

Among all the recent news about euphoria and a market "melt-up" several reasons exist to be cautious. During the last two and a half years central banks and countries around the world have added more fuel to the fire which has postponed the day of reckoning.

This has made all of us thinking the market was about to turn south looking rather silly and underscores the fact that trying to time economic events is both confusing and complex. Still, the fact the numbers do not work means reality will be visiting us soon. The reasoning is outlined below.

http://Economic Reality Will Soon Be Knocking On The Gate.html