Stocks Extend Gains Even As Market Prices Out Dovish Fed

Terrible news from LG and Samsung, dismal German economic data, and weak US JOLTS print... The world according to markets in 2019...

Chinese stocks flatlined (almost oddly) overnight...

 

European stocks closed higher, erasing yesterday's losses. German industrial production collapsed... so BTFD - means The ECB won't tighten as aggressively...

 

The day's price action was quite different from the end of day headlines with a big tumble in stocks after the cash open...

 

Today's market from the US open to the European close summarized succinctly:

It was high volume spikes into the ramp pre-market as algos grabbed every headline and ran with it...

 

Trannies and Small Caps outperformed on the day as markets were bid back off red as Europe closed...

 

Banks were hit from the open...

With the biggest banks dumped...

 

Tech stocks were also sold from their opening high but quickly rebounded after turning red...

 

HY Bonds extended their recent surge...

 

The Treasury complex was offered today with the short-end notably underperforming...

 

30Y Yields briefly pushed up to tag 3.00%, but barely moved despite the exuberant equity performance...NOTE that 30Y yields remain lower on the year (despite soaring stocks)

 

But as the short-end yields jumped, the yield curve flattened dramatically...2s30s back to 2-week lows...

 

The Dollar managed gains overnight and held on to them during the day...

 

Cable weakened notably all day ahead of a key vote (which the govt lost)...

 

Mixed day in cryptos with Litecoin and Bitcoin higher...Ethereum underperforming

 

Still wonder who's right?

 

WTI outperformed in the commodity space....

 

But was unable to break $50 again...

 

Gold slid back to unchanged on the year in Yuan terms...

 

Finally, we note that once again the market's expectations for The Fed this year shifted hawkishly (only 4bps of rate-cuts now expected) - dramatically less than the 26bps cut priced in on Jan 3rd...

And US macro data is catching down to the weakness of global data...

Who will be right?