Impetuous Markets

As regular readers are acutely aware, I’m a big fan of Bloomberg’s Richard Breslow. I’d even go so far as to say he’s a better writer than me (I know, I know, Heisenberg is supposed to exhibit Trump-like cockiness and a unwavering lack of humility… sorry).

Admittedly, I struggled to encapsulate everything that happened last week into one or two coherent pieces — which is why I wrote like five. But Breslow had no problem putting it all together in bullet point format. Enjoy…

If there’s one thing you can say about markets, it’s that they are on the move. No shortage of volatility, and it has all the qualities of impulsiveness. The impetuous kind. When asset prices move like this, be wary of saying “and the next target is.” It’s all about momentum and investors desperately trying to wrench their portfolios into some sort of alignment with a radically different story-line.

Take a look at U.S. Treasury yields. Just a week ago, the 10-year at 2% seemed far off and an obvious place to find real support. It’s been swept away with disdain

After Friday’s close at 2.15%, the logical technical projection suggested the low 2.20%s. Guess where we reached Sunday night in Asia? Don’t think in terms of 1 bp here or there

We’ve got a slew of Fed speakers on tap, including all of the big guns. With the new zeitgeist, they are probably, and rather remarkably, going to be pressed on how many for 2017, rather than whether they can slip one in at the December meeting

When the market’s hunting elephants, how economic numbers are interpreted needs to change. Beats that reinforce the current mood will have greater impact than misses. Cue the inflation numbers this week

Also, for right now, this is a U.S. story. It may all be about relative value, but strong numbers out of Japan today were never going to derail the dollar juggernaut

FYI, however, the dollar index has just entered the meat of its serious resistance swath and bears close attention. The easy work’s been done. The next percent is huge (sorry)

The same can be said about the S&P 500, which is threatening, but has yet to achieve, a top-side breakout. While, simultaneously, the MSCI emerging markets index is desperately trying not to swoon below its 200-day moving average

Everything U.S. is leading the way, followed by the rest of developed markets. Emerging markets are falling further behind. This is the real example of trickle-down economics

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