I have to admit that I’ve been surprised by the resilience of the major indices following the policy announcements of the past 2 days. The markets are bouncing this morning ahead of the payrolls number on little news (media says “reassessment” of Draghi’s comments, but that is a flimsy explanation). Having said that, many stocks are closer to making new lows than new highs (IWM acting much weaker than SPY), so maybe the market still playing a bit of 3 card monti. I am going to be patient with most of my positions.
- Asia closed mostly in the red with the exception of the Shanghai, which seems to beat to its own drum these days
- Risk-on started in earnest after the European open, with the Euro Stoxx 50 trading up as much as 3% from starting close to flat. SPX futures indicated up about 1%
- European banks (up 5%), after leading yesterday’s down move (down 6%), are leading today’s up move, and 10 year Italian and Spanish yields are retracing half of their move higher yesterday
- Dollar and Treasury bonds are broadly lower. Correlation between the 2 has been especially high in the last 3 months.
- Commodities mostly higher with the exception of the grains and natural gas
- PG reported better than expected earnings, but lowered its forward outlook. Stock is trading around unchanged. LNKD up 7% after beating on revenues and revenue guidance