Huge Short-Squeeze Sparks New Record Stock Highs As FX Vol Crashes To Record Low

Another day, another short-squeeze, and another record high…

This four-day squeeze is now of the size that has historically led to a reversal…

Source: Bloomberg

US equity markets were higher mainly thanks to the opening jolt (and of course the late-day meltup)…

Panic-bid at the close?

Why were stocks up? Because “that is the law”…

Nasdaq is now up 4% on the year…

…but that is less than 2019 and 2018 (and the same as 2017) for this far into the year…

Source: Bloomberg

Dow topped 29,200; S&P topped 3,300.

The S&P 500 Index is trading at the highest level over its 200-day moving average since late January 2018.

As Bloomberg reports, amid a solid monthly U.S. retail-sales report and diminished geopolitical risks, the benchmark has been looking heated from a technical standpoint, begging the question on how long the rally can last.

Cyclicals outperformed today but Defensives dominate the week…

Source: Bloomberg

Mixed day for banks with GS now best on the week and WFC still the laggard…

Source: Bloomberg

TSLA dared to have another down day, but we note that once again it was panic-bid at the cash open after weakness overnight…

Source: Bloomberg

Chinese markets were mixed with small-cap tech soaring as the big caps slipped…

Source: Bloomberg

European stocks were also mixed with Spain and Italy outperforming today and the rest unch…

Source: Bloomberg

VIX crashed to an 11 handle intraday and while credit protection costs slipped, they remain notably decoupled from equity risk…

Source: Bloomberg

Treasury yields were higher by around 2bps across the curve today…

Source: Bloomberg

30Y yields found support at YTD low yields…

Source: Bloomberg

The Dollar edged higher today, rebounding off the 50% Fib retracement of the year-end plunge…

Source: Bloomberg

JPMorgan’s gauge of global currency volatility hit an all-time low today…

Source: Bloomberg

Cryptos were lower today but holding on to the week’s impressive gains…

Source: Bloomberg

Bitcoin is holding around $8700 – well above the pre-Soleimani levels…best start to a year since 2012

Source: Bloomberg

Commodities were mixed today with copper down as crude rallied and PMs relatively flat…

Source: Bloomberg

Gold futures stalled at pre-Soleimeni levels again…

WTI bounced off $57 handle once again…

Finally, while today’s data was solid, the decoupling between stocks and macro fundamentals makes a mockery of markets (can you guess what’s really driving stocks higher?)