So first, this (summarized in two handy bullet points via Bloomberg):
- Vice President Mike Pence breaks a 50-50 tie in the U.S. Senate to allow debate to begin on legislation to repeal Obamacare.
- Senate votes 51-50 to agree to a motion to proceed to health- care legislation that was passed by the House, H.R. 1628, which would be subject to amendments; the exact shape of the bill remains unclear
Stocks hit more records today helped by Caterpillar and McDonald’s which were sharply higher on earnings (“I’m Lovin’ It“):
The Nasdaq underperformed as Google fell.
The VIX crashed near an 8-handle, which is pretty much all you need to know about that, although I guess it’s worth noting that it did move higher later in the session:
Yields rose throughout the session (ahead of the Fed) as multiple block trades weighed on Treasuries.
As Treasury yields go, so goes USDJPY, which was also buoyed by characteristically absurd BoJ minutes, which pressured the yen against all its G-10 peers:
these BoJ minutes are too much.
"One member said issue of specific timing of exit "could not be foreseen;"
— Heisenberg Report (@heisenbergrpt) July 25, 2017
Crude posted its biggest intraday gain in at least a week, as bulls are emboldened by promises of August export cuts from the Saudis and signs US operators are starting to rethink capex plans. Of course this could all turn around when the API data hits.
Notably, we’ve now recouped all the losses from the Petro-Logistics report that undercut the market on Friday:
The dollar fell sharply as the euro and the pound surged suddenly early this morning, but the greenback managed to recover, helped by rising yields:
The euro was hilarious, spiking hard to trade above 1.17 for the first time since August 2015, only to give it all back after an IMF report encouraging the ECB to keep its stimulus program in place citing downside growth risks:
The Germans are “euphoric”…
…which helped European stocks rally after two lackluster sessions:
Bunds fell with Treasurys:
Copper is loving all this optimism, and growth, and what not:
Finally, as Citi’s Matt King put it earlier this year, “we think the timing would be good for investors too to remember to what they owe their improvement in fortunes”…