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10Y dollar Dow FANG FX S&P 500

What Happens In Vegas.

A somber day. An ebullient market.

Needless to say, this was a somber day in the U.S., following the worst mass shooting in modern history overnight in Las Vegas.

We don’t have much to add on that, given that it appears to have no readily discernible connection to anything – i.e. this looks like the very definition of a senseless tragedy. Senseless even as senseless things go.

Stocks were undeterred as the Dow soared to a new record. The S&P rose as well, starting Q4 on a strong note after posting its eighth consecutive quarterly gain in Q3. Once again, the Russell was the big winner as the the “Trump trade” reboot seems set to continue.

Stocks2

We’re starting to see signs of a coordinated upturn in the global economy as manufacturing data out of China, Japan, and the U.S. suggests we’re on firm (or at least firmer) footing. The ISM print was “big league” and if it weren’t for the more pressing business of comforting a nation after a mass killing, you can bet Trump would have been touting it:

ISM

Prices paid printed a ridiculous 71.5:

That comes on the heels of a good read on the closely watched Tankan…

…. and also after the best read on China’s official factory gauge in five years over the weekend (don’t ask about the Caixin, Beijing will tell you that’s “fake news”):

China

It was a choppy session for the dollar and yields as investors weigh the outlook and grapple with the Vegas news while simultaneously clinging to (possibly misplaced) optimism around tax cuts and the possibility that Warsh will become Fed chair:

DollarYields

Gold is sitting near a 7-week low as the stronger dollar and higher yields weigh:

Gold

Predictably, gun stocks knee-jerked higher at the open. This is a familiar dynamic. In the wake of mass shootings, gun control advocates point to the violence as proof that more regulation is needed and that leads to the old “they’re coming for your guns” trade:

Guns

Here’s some visual history of that via Bloomberg:

Guns2

And here’s the familiar background checks chart:

Guns3

Generally speaking, we saw a continuation of the trade that’s taken hold over the past three or so weeks as banks and value outperformed while FB, AAPL, and Google lagged:

Stocks

In case you missed it earlier, the vol. sellers better hope Apple holds up because naturally, there is a negative correlation between the stock’s P/E and the VIX:

AppleVIX

European stocks rose across the board with one exception. Spot the IBEX (i.e. spot the equity market of the country that’s coming apart at the seams):

Europe

Oh, and in case you weren’t aware that global stocks have been rising, note that the MSCI World has delivered eleven straight months of positive total returns:

112

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1 comment on “What Happens In Vegas.

  1. just goes to show you what the stock market really worries about.
    money never sleeps, or should i say the bots–hmm.
    sb

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