The S&P 500 has moved into the 2800 zone and the longer it stays there , the more positive it gets (for the short term) .
As I intimated last night, market propping is happening , and if you wanted to push the market higher prior to the start you buy Dow futures contracts, JP Morgan was even 1.7% higher at the start despite a bad result and by the end of the day, it closed 2.7% lower. Market gains were driven by the Masters of the Universe again, all they had to do is buy up Apple (up 5%), Amazon (up 5%), Microsoft (up 5%), Netflix (up 4.2%) and you have Nasdaq at 8515 and Dow up 559 pts.
US is going down the road of China and Japan, just pull out their charts over the last 10 years. The Fed is not going to pump liquidity forever, this is only until we can return to some form of normalcy.
Follow the money and don't fight the Fed , as they say. It sounds easy right and we can just ignore bad earnings, fundamentals altogether and take out our biggest shopping cart, except that we are not insiders who know when the short term push to the upside ends and we are a day behind, and even when the push ends, we may still be locked in our perception the game remains. If this is not the elites new form of corruption what is - using taxpayers money to enrich the insiders. Now you understand why some businessmen want to be President! Gold Jumps, Crude Dumps As Nasdaq Squeezes To Best Run In 5 Months
by Zero Hedge
Tue, 04/14/2020 - 16:00
The only thing driving stock markets right now...
Masa Capital@MasaSonCap
...and neither is virus optimism? Source: Bloomberg
And, as Steve Liesman noted: "The Fed is starting to weigh in (a bit of out school) with its view on how to bring the economy back. Evans (chicago fed) just joined Bullard (st. louis fed) in calling for massive national testing. Evans also called for a "Manhattan Project" to find a vaccine."
Which also helped spark some more optimism in stocks - because now The Fed members are all expert epidemiologists too... NOTE - The European close marked the reverse of the downtrend... Small Caps and Trannies remain red on the week however....
This is the NASDAQ's longest winning streak since December (QQQ up 6 days in a row, best run since Dec 26th) and pushed it back above its 50- and 200-day moving-average... Banks were clubbed like a baby seal after a positive initial reaction... Source: Bloomberg AMZN hit a new record high today, back above the $1 trillion market cap... Source: Bloomberg
Helping to send FANG Stocks soaring back near record highs... this is the biggest 2-day surge in FANGs since the massive short-squeeze meltup at the start of January 2019... Source: Bloomberg
Despite stock gains, bonds were bid (though a late-day selloff took the shine off)...(2Y -1bp, 30Y +6bps on the week) Source: Bloomberg
10Y Yields remain rangebound... Source: Bloomberg Spot Gold rallied on the day to almost $1750... Source: Bloomberg
,,,but the Spot-Futures spread compressed... Source: Bloomberg And oil prices plunged... Brent below $30... Source: Bloomberg
And WTI below $20... A key gauge of the oil market’s health is at its weakest in more than a decade as supplies build and futures contracts roll over. West Texas Intermediate crude for May delivery traded at more than $7 a barrel below its June contract on Tuesday, the deepest contango since 2009. The May contract is nearing expiration and exchange-traded funds, including the United States Oil Fund, have been selling front-month contracts and buying second-month futures. Source: Bloomberg
Who's drinking OPEC+'s milkshake?
As the dollar drops to one-month lows... Source: Bloomberg Finally, we let Shard Capital's Bill Blain sum things up... Work out why the market is fooling itself. Markets are scared of change, with a default position things will revert to “as-they-were.” This time they will not. There are a number of dangerous narratives playing out in markets at present – all of which expect things to revert to “same-as”.
1) C-19 is going to go away because of “curve flattening”, and we will have a vaccine in a few months time. No. We might have a vaccine in a year or so, and Might is not a winning market strategy. C-19 might not go away any time soon.
2) This is not a real war. No means of production like factories, ships, infrastructure have been destroyed. Everyone can start working again when the all clear sounds. No. As the old adage goes – 40% of American’s are one pay-check away from bankruptcy. A recent survey says nearly 40% have seen family members lose jobs, and 30% of Americans think their jobs are at risk.
3) Global trade will swiftly fill any supply gaps.No. Protectionism is going to play front and centre as countries seek to ensure they are not caught again. The World had changed!
And nowhere is that "change" more evident in the correlation between stocks and gold as debasement/hyperinflation fears begin to leak into markets... Source: Bloomberg
As Bloomberg notes, Gold and global equities don’t usually move in tandem, but these are not usual times. The two assets -- one a traditional haven and the other a classic risk-on bet - had an inverse correlation for most of last year, but as investors navigate the fallout from the coronavirus, they’ve started to move more in sync. Both nosedived in mid-March amid panic selling and forced margin calls; each then recovered by about 20% as central banks and governments kicked in more stimulus. Source: Bloomberg That official support has aided stocks, while also fanning concerns about currency debasement and rising debt levels, supporting bullion.
As seen in the surge in USA sovereign risk... Source: Bloomberg
And it can never stop... "There is no escape for Central Banks and Governments from the consequences of their actions – they can’t pull fiscal spending without crushing the economy, and they can’t pull back monetary market support for fear of crushing confidence. They have "crossed the diamond with the pearl" to create the ultimate market drug high, and markets can’t face cold-turkey. The merest hint of a taper tantrum today – and we’re talking massive market reset. Negative rates look inevitable."
