Did The Fed drink the bull's liquidity milkshake?
Chinese stocks were ugly again…
But FX "stability" and BoJ hope enabled overnight buying in stocks, which was then "enabled" even more by Russia-OPEC headline confirmations, confusions, and confessions… ands finally denials. While stocks did get some momentum fillip from crude's chaos, it appears yesterday's Fed-driven decoupling remains in place…
Trannies did not love higher oil prices and were red on the day as Nasdaq benefitted most from the exuberance in FB…Notice there was no bid after the gap open (and in fact everything but Nasdaq was sold)..
The Dow managed to scramble back to unchanged for the week briefly (but nothing else did) but was unable to hold it…
But S&P remains red post-Fed
The Dow has travelled over 2250 points in the last 30 hours… to unchange from yesterday's open…
FANGs were frigging awesome after Facebook's phenomenal earnings…
And UA rose most in 2 years..
But Biotechs were battered…
Treasury yields rose very modestly on the day (withthe short-end underperforming) as bonds performed relatively well given equity moves thanks to the very strong foreign bid at the 7Y auction
Stocks decoupled…
The USD Index continued to slide lower – down 1% on the week to 2-week lows (and actually in the red for 2016)…
Oil rallied – on more Russia-OPEC proiduction cut rumors (and denials) but despite USD weakness, gold, silver, and copper all drifted lower…
The day in crude rumors and denials…
But it was the chaos in PMs that was even more notable (especially silver) but that was oddly missed from the headlines…
* * *
So in summary, welcome to the "VUCA" world, the Volatility, Uncertainty, Complexity and Ambiguity that seem to characterize the zeitgeist, at least in financial markets is set to continue as BofAML's Mike Cantopoulos warns The Fed’s ambiguity yesterday points to a volatile next couple of months, particularly as all options seem to be open for March.
Unfortunately the antidote, Vision, Understanding, Clarity and Agility doesn’t seem easily at hand at the moment as markets seem to move swift and deep with little warning or catalyst; particularly equity markets.
In short, we continue to recommend higher than normal cash balances and careful name selection. Avoid crowded trades and those companies that have relied on a growth through acquisition strategy. Stay away from names that haven’t sold off yet, rely on global growth for sales or are exposed to US manufacturing.
Charts: Bloomberg
via Zero Hedge http://ift.tt/1PWga48 Tyler Durden