“Going Once, Going Twice”: 10Y Treasury Auction Has An “Oops” Moment

Oops. Going into this week’s 10- and 30-year Treasury auctions, there was a palpable sense of trepidation among some traders. Take Bloomberg’s Richard Breslow (whose daily market commentary is fantastic if you can get your hands on it), who wrote the following early this morning: “Today and tomorrow, the U.S. Treasury is auctioning 10-year and…

Theory Officially Triumphs Over Common Sense As Markets Hit Record On More Helicopter Talk

Theory Officially Triumphs Over Common Sense As Markets Hit Record On More Helicopter Talk So there are only three charts you need today. The first is a two-day chart of the yen: The second is of course the S&P: And the third comes courtesy of Google Trend: We talked at length on Monday about what’s…

Earnings Season Kickoff: A Look Across The Market

As we get set for what promises to be a rocky earnings season (consensus has S&P earnings falling for the fifth consecutive quarter), let’s take stock of how far we’ve come since Brexit. Here’s a look at global equities: Not bad, right? UK stocks are up 11% off the closing lows on Monday, June 27.…

“Get To The Chopper”: Japan Election, Bernanke Visit Fuel Helicopter Money Rumors

We’ve talked plenty in these pages about the ebb and flow between the Japanese yen and risk assets. Simply put, the yen is a safe haven currency. When you wake up to see it’s appreciated sharply against the dollar in the overnight session, you can pretty much immediately infer that the mood out there is…

Mind The Equity Risk Premium

So we made it through non-farm payrolls Friday unscathed. In fact, we got a humdinger of a number that at one point during the session propelled the S&P to new record highs. The next hurdle for markets: earnings season. On the whole, y/y earnings growth for S&P 500 companies is expected to come in somewhere…

Life In A ‘Negative’ World

This morning, following a blockbuster of a June payrolls report, we flagged the disparity in how US Treasury yields should have behaved and how they actually behaved. If you truly want to understand how distorted this market has become, have a look at the following chart going back to 1998: As you can see, this…

No, The Fed Probably Won’t Hike On Huge Jobs Beat

Coming into NFP Friday, it kind of felt like stocks were going to go up either way. After all, there was virtually no chance of getting a June jobs number as bad as May’s report, a modestly underwhelming print would keep the Fed on hold thereby forestalling the tightening cycle yet again, and in the…

Big Macs and Big Buildings: The “Gates” Are Up In The UK

If you had no idea how the Brexit vote turned out, you could certainly surmise what happened just by glancing at the following chart: What do you see? That’s right, a stronger dollar, a stronger yen, and sharp declines in the Chinese yuan and British pound. Actually it’s not entirely accurate to call the pound’s…

Red Light, Green Light

Earlier this week, we explained how pretty much everything you’re seeing in terms of market swings can be at least partially explained by central bank frontrunning. Stocks up? Investors anticipate the Fed will delay its next hike thanks to the Brexit debacle. Dollar up? Investors know that even if the Fed doesn’t hike, it’s still…

Fed Minutes Reveal Pernicious Policy Paradox; Bond King Says Hang On To Gold

They needed some “additional data.” Data like a vote count from the UK, where the possibility of an imminent black swan landing sealed the deal for no FOMC hike in June. "Members generally agreed that, before assessing whether another step in removing monetary accommodation was warranted, it was prudent to wait for additional data on…