Soaring Investor “Greed” Sends Dow To New Record High Despite Momo Massacre

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Soaring Investor “Greed” Sends Dow To New Record High Despite Momo Massacre

Why are stocks soaring? Simple – it’s the fun-durr-mentals, stupid!

Soaring Investor "Greed" Sends Dow To New Record High Despite Momo Massacre

Source: Bloomberg

And everyone is chasing it now…

Chinese stocks all ended the day higher, but the afternoon session saw some giveback…

Soaring Investor "Greed" Sends Dow To New Record High Despite Momo Massacre

Source: Bloomberg

European stocks were all higher on the day, UK’s FTSE the laggard, Italy leader…

Soaring Investor "Greed" Sends Dow To New Record High Despite Momo Massacre

Source: Bloomberg

European equities surged to their highest level since August 2015 as miners to automakers advanced on optimism that U.S.-China trade talks are progressing.

Soaring Investor "Greed" Sends Dow To New Record High Despite Momo Massacre

Source: Bloomberg

Major US equities indices were all higher (Dow joining the party at record highs) with Trannies outperforming (NOTE – the indices basically did nothing from the US cash open onwards – except Trannies)…

Soaring Investor "Greed" Sends Dow To New Record High Despite Momo Massacre

 

Futures show the action a little better with the US-China deal headlines sparking a pre-open ramp to record highs and then once Europe closed, stocks faded…

Soaring Investor "Greed" Sends Dow To New Record High Despite Momo Massacre

Defensives were straight down from the open as Cyclicals gapped open (short-squeeze – see below)

Soaring Investor "Greed" Sends Dow To New Record High Despite Momo Massacre

Source: Bloomberg

Momo stocks were massacred, extending Friday’s plunge… this is the biggest 2-day drop since the peak of the quant quake in September…

Soaring Investor "Greed" Sends Dow To New Record High Despite Momo Massacre

Source: Bloomberg

As Michael Krause (@michaelbkrause) noted so succinctly:Junk stock short squeeze day. L/S momentum falling apart, value not picking up the slack, and most volatile stocks killing it… The pious quants with a long-term research-driven view are off-sides today.”

And sure enough, “most shorted” stocks ripped at the open, thanks to yet more trade deal rumors…

Soaring Investor "Greed" Sends Dow To New Record High Despite Momo Massacre

Source: Bloomberg

And as momo melts down, stocks soar to record highs but Bloomberg’s SMART money flow indicator signals the big boys are not playing along…

Soaring Investor "Greed" Sends Dow To New Record High Despite Momo Massacre

Source: Bloomberg

Treasury yields were all higher on the day with the long-end notably underperforming…

Soaring Investor "Greed" Sends Dow To New Record High Despite Momo Massacre

Source: Bloomberg

Which sent the yield curve notably steeper – erasing the post-Powell flattening…

Soaring Investor "Greed" Sends Dow To New Record High Despite Momo Massacre

Source: Bloomberg

30Y yields spiked 8bps today but if the quant quake is anything to go by, the yield should be soaring back near 3.00%…

Soaring Investor "Greed" Sends Dow To New Record High Despite Momo Massacre

Source: Bloomberg

Notably, the market expects just 1.2 more rate-cuts by the end of 2020 – dramatically less dovish than the 5 cuts expected in early September (2 of which have been delivered)…

Soaring Investor "Greed" Sends Dow To New Record High Despite Momo Massacre

Source: Bloomberg

The dollar surged back to the lows of FOMC day…

Soaring Investor "Greed" Sends Dow To New Record High Despite Momo Massacre

Source: Bloomberg

Bitcoin and Ethereum trod water since Friday with Bitcoin Cash and Litecoin outperforming…

Soaring Investor "Greed" Sends Dow To New Record High Despite Momo Massacre

Source: Bloomberg

PMs were lower on the day, copper and crude gained but the latter gave plenty back after Europe closed…

Soaring Investor "Greed" Sends Dow To New Record High Despite Momo Massacre

Source: Bloomberg

WTI held on to its $56 handle but couldn’t hold the $57 intraday…

Soaring Investor "Greed" Sends Dow To New Record High Despite Momo Massacre

And while gold slipped, it remains above $1500…

Soaring Investor "Greed" Sends Dow To New Record High Despite Momo Massacre

Gold/Oil is back at the upper end of its long-term rang again…

Soaring Investor "Greed" Sends Dow To New Record High Despite Momo Massacre

Source: Bloomberg

Since Powell’s dovish inflation comments, gold remains the leader – despite stocks surge today…

Soaring Investor "Greed" Sends Dow To New Record High Despite Momo Massacre

 

And finally, investors haven’t been this ‘Extremely Greedy’ since 2017…

Soaring Investor "Greed" Sends Dow To New Record High Despite Momo Massacre

Source: CNN


Tyler Durden

Mon, 11/04/2019 – 16:00

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