The first part of the session looked sort of tame with the exception of the Dow (+1.40%) outperforming the broader indices. Financials had been leading - up around 1.5% - even with tepid NYSE breadth and the Nasdaq (+.67%) achieving an intraday all time high but generally taking a break and still flat at mid-session. Things heated up after 14:00 and bulls got very busy into the close.
The materials sector (+1.86%) pulled ahead of Financials (+1.84%) , while the utilities sector (-2.13%) was the only negative performer on the day.
Breadth improved in the afternoon but not in a dramatic fashion that one would expect given the end of session rally. NYSE A-D lines ended +844, NYSE breadth: +2.64:1 and NASDAQ breadth: +2.44:1.
The CBOE put/call ratio is getting pretty low.
The VIX (11.64 or -6.13%) is low...how low will it go? When you get a market that fails to exhale for this many days in a row combined with depressed volatility - relative to recent action - some participants get nervous. But some notable bulls were out on twitter in droves in the early session, proclaiming victory in a way that I have not seen in months. This sometimes means what I call 'the window of disbelief' is upon us. That period as one in which many participants cannot believe their eyes are rather paralytic during a melt up that defies their expectations and that continues day after day.
Treasury futures (ZNU8 -.04%) were sold again and the 10 Year yield is now back up to 2.98%. Notes across the range were sold and the yield curve slope was little changed.
Watching Europe - the DAX had a volatile session amid ECB making noises about ending its asset purchases. The ECB's chief economist said that European weakness of late is temporary and Bundesbank's president said that it is plausible that asset purchases could end this year. The market has been expecting dovishness on the heels of the Italian situation and weaker economic numbers. Speaking of central bankers, emerging markets like India are not all too happy with the Fed's current trajectory of balance sheet reduction. India's Central Bank governor recently wrote an open letter to the Federal Reserve in the FT, advising them not to rush things. The idea is that the current pace of Treasury issuance on the back of recent tax cuts will precipitate a bond market crisis.
Is the ECB also sending some kind of message to the US administration? Perhaps they are beginning to feel that it is not in their best interest to let the yanks have their cake and eat it too while the US gets frisky with tariffs.
Metals bulls may see a benefit to all this if hints turn into action. The USD Index is off somewhat today and gold is stabilizing a bit though still waiting for a tangible catalyst. Perhaps a weaker Dollar will do it.
(20min delay)