Stocks Bounce On Biggest Short Squeeze In A Month

Must.Get.Stocks.Higher...

Chinese stocks gave up early gains in the afternoon session to close modestly lower...

 

European stocks surged (led by FTSEMIB) on the heels of hope for an Italian budget deal...

 

US Futures show the ramp around the European open and again at the US open, weakness around the European close, and then an afternoon of low volume bids...

 

On the cash side, Nasdaq was the biggest gainer in the squeeze, Trannies and Small Caps underperformed...

 

S&P high stalled just ahead of the 2017 closing level of 2673.61.

That keeps the index in the red for the year. I know it is somewhat random. Why is the last day more important than the 1st day or the 50th day or the 100th day. But it is. It makes a difference.

Volume was 30% below recent average...

Some context for the bounce...

 

Another ramp 'funded' by another 'short squeeze'...but the squeeze ran out of fuel shortly after the European close...

 

GM was halted on terrible news and soared 7%!!

GE hit new cycle lows...

Apple, however, tumbled on bad news - dropping below MSFT market cap for the first time since May 2010...

 

Credit market compressed on the day, but VIX compression is outpacing them for now...

 

Treasury yields rose on the day with the long-end outperforming (up 1bps vs 2-3bps across the curve)...

 

The dollar extended its gains, rallying to 2-week highs...

 

Cable gave up early gains to fall back to pre-"deal" levels once again...

 

Offshore Yuan also roundtripped today, selling off since the European open after rallying through the Asia session...

 

Cryptocurrencies bounced back a little today after the bloodbath of the weekend...

 

Dollar strength weighed on copper and PMs but crude managed to bounce...

 

Another dead cat bounce in crude...

 

Gold continues to be pegged around 8500 Yuan... (or is it vice versa?)

 

Finally, courtesy of Bloomberg's Michael McDonough, we suggest the global economy is not doing so great after all...

The biggest collapse in global auto sales since the financial crisis??!! Not exactly reassuring.

And in case you were hoping for this bad news to be good news - forget it - as Morgan Stanley explained:

...we think that a major challenge for US assets next year is that [The Fed] is 'boxed in' – better-than-expected growth will simply mean more Fed tightening, while weaker-than-expected growth will raise slowdown risks, with limited scope for policy support. In a major change from the last 10 years, both good news and bad news create problems for US markets.

Retail investors in U.S. stocks are now the most bearish on the market’s direction since February 2016, according to the American Association of Individual Investors weekly survey.