10Y dollar economy FX puerto rico S&P 500 spain


"To be a moron."

Listen, if you’re buying stocks up here, you’ve probably “freed yourself up to believe that it’s ok to be stupid, or dumb.”

To be a moron.


Because what you’re buying into is a market that, in terms of maximum continuous drawdowns during a year, is about the set a record for the smallest such loss for the S&P in nearly 100 years:


But that’s ok. Because in 2017, it’s fine if you’re a “moron.” Just ask Rex Tillerson who, according to multiple sources, called Trump just that a couple of months ago.

For his part, Trump claimed that Tillerson’s impromptu Wednesday presser “proved” that the NBC story wasn’t true. Listen to this clip and see if it sounds like “proof” to you:

Draw your own conclusions.

And also draw your own conclusions as to whether it makes sense to keep buying in the face of valuations that look like this for equities and credit:


Whatever. Stocks were largely flat on the day with the Russell underperforming in a break with recent precedent.


A hot ISM report (prices paid printed 66.3, the “bigly-est” since February 2012) helped the dollar and put pressure on Treasurys.


As Bloomberg notes, 63k 10Y futures traded in the 5 minutes after the report while odds of a December Fed hike climbed to 68% from 65% beforehand.

Trump’s going to literally kill the muni market (we assume accidentally, even though he is “the king of debt”):


What’s that you ask? Oh, nothing. Just Puerto Rican debt converging with that of Venezuela after Trump said maybe the island’s burden needs to be “wiped clean.”

“It’s unclear whether President Trump can change Puerto Rico’s debt outlook, which is under the jurisdiction laid out in the Promesa law — but if he’s able to wipe away all the island’s debt, that might be the end of the municipal bond market as we know it,” MKM’s Harry Fong wrote in a note, summing up how truly moronic an idea this is.

Needless to say, that wasn’t great for MBIA and Ambac:


Here are some of the “proud” owners who would be affected:


Tough day for crude, as WTI fell below $50 on fears that surging exports will contribute to a global supply glut.


Here’s the exports chart (+493k b/d to record-high 1.98m b/d last week):


“There was a need for light, sweet crude. Guess what? U.S. exports are meeting that need and on top of that, crude demand is going down seasonally,” SocGen’s Michael Wittner remarked.

This hasn’t been a great week for Spanish stocks which makes sense because you know, the country is falling apart. Here’s the juxtaposition with the broader European market:


People are super-excited about Chinese equities thanks in large part to the RRR cut over the weekend, and with the mainland closed, that’s showing up in Hong Kong:


Enjoy your evening and as always, never go full retard.



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