Another vaccine story and the US markets went gaga again ,the Dow added 530 pts to close five points away from the 25k mark while the S&P500 after breaking through 3000 and looking to stay for most of the day capitulated in late selling that took it down to 2992. Vaccine Vacillation Sparks Stock Surge, Dollar Purge
by Zero Hedge
Tue, 05/26/2020 - 16:01
US equity markets roared higher overnight on several vaccine-related headlines (but repeated China sanctions headlines - especially at the close, took the shine off the ball, especially for tech stocks)...
Shrugging off Gilead's Remdesivir "statistically insignificant" results and Moderna's reality checks in favor of Merck and Novavax...
NOTE - Moderna is now 20% below its secondary offering levels.
Novavax soared early on the back of an announcement that it was planning on starting a phase 1 trial in Australia... no results at all... But the market didn't hold all those gains...
It appears Dr.Fauci's optimism was unfounded... just as his pessimism was too...
Of course, US equity markets are not alone in their irrationality. Nothing says bid the yuan like Washington threatening China with sanctions and capital controls... Source: Bloomberg
And nothing says Buy Hong Kong stocks like the cavalcade of freedom-crushing new laws and headlines unleashed from the mainland this weekend... Source: Bloomberg
While the Nasdaq (blue) lagged on the day it was still higher on the day BUT just look at Trannies (green) and Small Caps (red). Dow broke above 25k and S&P above 3,000 before the whole fragile facade fell apart on repeated headlines on China sanctions...
The S&P 500 broke above its 200-DMA and Small Caps tested their 100DMA (as The Dow got close) but the late-day China sanctions headlines spoiled the party...
But it was a different crowd leading the day with FANG stocks back at one-week lows... Source: Bloomberg
As FANGs faltered, Bank stocks soared... Source: Bloomberg
But the "virus fear" is fading fast once again... Source: Bloomberg
"Most Shorted" Stocks extended their fourth squeeze leg higher... Source: Bloomberg
Treasury yields were higher across the curve with the long-end notably underperforming (2Y +1bps, 10Y +7bps)... Source: Bloomberg
The Dollar dumped notably today - biggest daily drop in 2 months...
Breaking below critical support... Source: Bloomberg
Cryptos have slipped lower since Friday... Source: Bloomberg
Oil and copper ended the day higher but, despite the dump in the dollar, precious metals ended the day down... Source: Bloomberg
Finally, you have to laugh really... The last 16 trading days have seen the S&P rise 163.0 points from the US day session close to the open the next day... and fall 4.3 points from the open of the US day session to the close. Source: Bloomberg
