Monday Humor…
Emerging markets are crashing, Italian capital markets are imploding, European money-markets are getting anxious, US bonds and the dollar do absolutely nothing… but The Dow spikes 300 points…(thanks to Boeing et al)
….On the basis of Steve Mnuchin proclaiming a ceasefire in the trade war…
Futures show the malarkey better with the insta-lift at the Sunday open, another momo ignition at the US open, a dump at the European close…
Italy stole the headlines in Europe… As Peter Boockvar pointed out so eloquently, the Italian 2 yr yield has given back 3 years of monetary suppression in 6 trading days.
And Italian banks are a bloodbath still…
The last month has seen EU banks massively underperform US banks…
Tesla was tumultuous – ripping on Musk’s high-end Model 3 comments, dropping on Consumer Reports and yet another crash… but bonds weren’t buying any of it…
Media types were excited about The Dow breaking 25k…Rescued at the last second…
VIX was pressured each time…
Another day another short squeeze at the open…
Treasury yields traded in a very narrow range going nowhere on the day…
The yield curve extended Friday’s flattening trend…
The Dollar roundtripped to end the day unchanged…
Emerging Market FX actually managed a gain today (but don’t get too excited)
But the Turkish Lira continued its carnage…testing a record low 4.6/USD today
Cryptocurrencies had a decent weekend but Monday morning blues sent them lower…
Gold ended the day unchanged (silver outperformed) but copper and crude rallied (trade hope)
Finally we note that stocks and credit have decoupled again…
Credit and equity protection costs are also decoupled…
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