A ‘Gettin’ Away With Murder’ Type Of Day: Thursday Market Wrap

Thursday was all about people who might have gotten away with murder.

Haruhiko Kuroda and Mario Draghi allegedly murdered two-way markets and as is abundantly clear from the following two headlines, they not only got away with it, but are in fact still at the scene of the crime:

  • KURODA: BOJ WILL PERSISTENTLY CONTINUE POWERFUL EASING
  • DRAGHI SAYS ECB TO STAY IN MARKET ‘FOR REALLY LONG TIME’

OJ Simpson allegedly murdered two people and he was granted parole on Thursday after spending years in prison on a charge unrelated to the alleged murder.

Finally, Donald Trump allegedly murdered democracy and today he found out that special counsel Robert Mueller is expanding an ongoing probe into that crime against America’s sacred institutions.

So how did markets react? Well, we’re glad you asked.

Stocks dipped on the Mueller headlines but quickly recovered and kind of limped higher after that:

SPX

Same story for the VIX, only in reverse of course and as usual, we ended up back comfortably at a 9-handle:

VIX

Tech stocks have now recouped the entirety of their June swoon and JPMorgan’s technical analyst thinks it might be make or break from here. To wit (via Bloomberg):

A 10-day rally in tech stocks has put the Nasdaq 100 back in a range that portended the June rout, and another failure to break out would suggest a decline of as much as 15% from current levels, JPMorgan’s technical analyst Jason Hunter wrote in a note.

  • Setup would get “really dicey” if NDX rolls over in the 5,892-6,186 zone again as that signals a potential pattern of “an even broader bearish reversal”
  • Worst-case scenario would indicate a drop to 5,000, a level where NDX broke out in early 2017
  • Critical support levels include:
    • 5,568 May low
    • 5,504 Jun 2016 channel low
    • 5,442-5,479 late-April gap/breakout area

NDX

Chipotle was under pressure again because apparently your Norovirus burrito now comes with a complimentary side of live mice:

CMG

The MOVE (Treasury VIX) hit a record low, which is just par for the course with all things vol.-related.

MOVE

Oil fell, but note that Brent did manage to hit $50 for the first time in six weeks before meandering lower. As a reminder, crude has been supported this week by a report on reduced exports from Saudi Arabia and bullish inventory data.

Brent

“You’re getting a lot of positioning,” Bill O’Grady, chief market strategist at Confluence Investment Management in St. Louis, told Bloomberg by phone. “Breaking $50 on Brent probably encouraged some people who’ve been long to say, ‘I think I’m going to take tomorrow off, so let’s just cash in and go home.'”

The euro was of course the story of the day in FX land, surging through its 2016 highs after markets ignored the ostensibly “dovish” Draghi:

EURUSD1

That weighed on European equities which drifted lower after the presser:

EquitiesEuro

Bunds were batshit as traders couldn’t decide whether Draghi was in fact as dovish as everyone claimed he was or, alternatively, as hawkish as FX markets suggested:

Bunds

USDJPY fell on the Mueller headlines but bounced, tracking Treasury yields higher later in the day:

USDJPY

Treasuries drifted lower from session highs into the close, prompted by poor 10Y TIPS auction and late USD/JPY gains moving the cross back to positive on the day; 10Y futures gravitated around 126 level (call strike where most open interest lies) ahead of Friday’s options expiry,” Bloomberg notes, recounting the day.

The dollar fell on Draghi, Mueller, Trump, policy uncertainty in Washington …. you fucking name it. Here’s where we are on that:

DXY

Gold rose because apparently, some folks think that a widening probe into whether the leader of the previously free world might have colluded with a hostile foreign power might portend trouble ahead (imagine that). Here’s the spike on the Mueller headline:

Gold

Finally, the big picture:

Nirvana

So that’s a wrap for Thursday.

We’ll leave you with the only visual you need…

OJ

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4 thoughts on “A ‘Gettin’ Away With Murder’ Type Of Day: Thursday Market Wrap

  1. One of the tenets of our democracy is that one is innocent until PROVEN guilty…not convicted by “unameded sources”, unsupported allegations by talking heads at completely biased media outlets or even by you buying that blather. There are leakers everywhere and if there were any actual proof of Trump cirmes against humanity, they’d have been leaked. There is no evidence. There has been no trial. There has been no conviction by a jury of peers. Ergo, if you actually believe in our democracy, there is no guilt! In fact, pronouncing guilt without so much as one actual shred of evidence is indeed an attack on our democracy.that’s on you. So quit adding blather to the noise. Stick with your very cogent market analyses and just stop with the anti-Trump claptrap!

    • The problem with your analysis of Trump’s guilt or innocence is the investigation has not been completed, in fact it has barely begun. The prior weeks did not necessarily even include Daddy Trump but he has now been included – so maybe you should not hold your breath. The evidence is building up and even looking more like guilt than innocence; Trump has certainly crossed the line in his behavior and comments. He is completely ignorant of what department head some of his “targets” are required to answer to and he seems to think they all answer to him — wrong. And for some reason I keep hearing that Shakespearean quote echoing ….. “The lady doth protest too much, methinks.” Just change the pronoun and it’s a match.

      He is now being investigated due to his own son’s recent actions and both son’s prior comments about the Trump business being involved with Russia, i.e., investing in golf course development, etc. Trump sure seems nervous all of a sudden. 🙂

      – Murphy

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