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November 21, 2014

Central Banks Go All In Pushing Stocks To No Man's High

By Tyler Durden at ZeroHedge 

Despite the knee-trembling awesomeness of a double-whammy promise of liquidity, US equity markets ended the week on a decidedly down note. The realization that Draghi's all talk (no impact on US stocks) and PBOC's move is not a liquidity surge and has limited impact on the economy left stocks tumbling once the opening OPEX levels had printed. The USD rose notably on the day after EUR plunged under 1.24 on Draghi (USD +0.9% on the week). Despite USD strength, gold rose 1% (as did Silver) on the week, rising for the 3rd week in a row for the first time in 4 months (and the 3rd Friday surge in a row). Oil rose 1% on the week, breaking an 8-week losing streak but Copper prices fell around 0.3% on the week, having given back the kneejerk gains post-PBOC today. Treasury yields dropped after kneejerking higher on PBOC. 30Y at 3.01% had its 2nd lowest weekly close since May 2013. VIX melted down into the close to 13.01. Late-day buying panic lifts stocks off their lows leaving Dow & S&P at all-time recordest highs of all-time ever in history (as small caps closed red).

The last 4 weekly closes for the Russell 2000 are 1173.5, 1173.3, 1173.8, 1173.5

From Draghi/PBOC...

Cash markets were a one-way street from the smash OPEX open...bounced in their nornal Friday afternoon way BUT closed ugly...

On the week... Russell Red on the week

AUDJPY was the driver for US equity's surge... but JPY carry largely uncoupled after the US open...

And gold, Treasuries, and stocks decoupled on the day...

VIX melted down to 13.01 into the close to ensure every index closed green (as Nasdaq briefly trouched unch)

Credit and Treasuries notably decoupled on the week...

Treasury yields fell today after a modest kneejerk higher on the Draghi/PBOC headlines... 30Y yields closed at the 2nd lowest weekly close since May 2013.

FX markets saw major USD strength today led by EUR plunging back below 1.24 on Draghi's jawbone... 4th up week for USD in last 5

The USD strength did not weigh on precious metals which gained around 1% on the week after volatile days on Wednesday (FOMC Minutes) and today (Draghi/PBOC). Oil broke ts 8 week losing streak ahead of next week's OPEC meeting. Copper dropped on the week despite PBOC

Commodities were volatile today, dropped on Draghi, surged on PBOC, then faded after Europe closed...

Charts: Bloomberg
Bonus Chart: HY credit decoupled...

Courtesy Tyler Durden, founder of ZeorHedge (EconMatters author archive here

The views and opinions expressed herein are the author's own, and do not necessarily reflect those of EconMatters.

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Item Reviewed: Central Banks Go All In Pushing Stocks To No Man's High Rating: 5 Reviewed By: Econ Matters