Trick Or Treat.

First of all, remember this on Halloween:

Think: “bigly” records. Here’s LPL Financial (this is from yesterday, but now it’s in the books):

  • Now that’s a win streak. Should the S&P 500 Index close higher on the month (it is up more than 2% with less than a day to go), it would be the longest monthly total return win streak ever going back to 1950. That’s right, the S&P 500 would be higher an incredible 12 consecutive months on a total return basis, which would top the streaks of 11 in 1954 and 1959. Here’s the catch, the S&P 500 is up 23% over the past 12 months, which is a lot, but by no means extremely stretched. In fact, going back since 1950, this would rank in the top 76% for all 12-month returns. Again, this has been a solid 12 months, but when putting things in perspective, the past 12 months haven’t been what we’d classify as an extreme blow off move; it has been more like slow and steady. It is important to remember that markets don’t peak when things are calm, we tend to see more volatility near ultimate market peaks.

Here’s a snap shot of the month (you can see the moment when the tech titans delivered upbeat earnings):

Stocks

Tech accounted for a disproportionate share of the market’s monthly gain. Have a look at this:

Sectors

Speaking of tech, this doesn’t say much for breadth:

QQQ

We’re back to “irrational exuberance”:

CAPE

But that’s fine because Shiller is “still in the market himself”:

 

Apparently, Bloomberg’s Anchalee Worrachate is going as an asset bubble for Halloween. To wit:

When I described my asset-bubble-themed Halloween costume yesterday, it wasn’t meant as a joke. While some may argue that central banks’ liquidity, which is still ample, will reduce the risk of financial bubbles bursting, many would agree that prices at current levels warrant caution. My colleague Srinivasan Sivabalan and I crunched some numbers and they showed:

  • Stocks: Several markets trade at or near their record-high price/book ratios (based on Bloomberg estimates), including Denmark, Kazakhstan, Lithuania, Latvia AND THE U.S.
  • Bond yields: Despite global growth accelerating, bond yields, as proxied by the Bloomberg Barclays Global Aggregate Total Return Index, are still close to a record low. At 1.61%, the aggregate yield is half its 20-year average and nearly 9 percentage points away from its peak.
  • Corporate bonds: U.S. credit spreads are at their tightest in three years.
  • House prices: One of the best way to measure house price affordability is to look at a house-prices- to-income ratio. According to IMF data, these are among developed countries where the ratio are above 100% as of the end of last year — Austria (130%), Australia (116%), Germany (114%), U.K. (111%), U.S. (106%), Japan (104%).

Looks like talk of value’s resurgence versus growth was premature:

ValueGrowth

As far as yields go, its worth panning out to capture that Friday ahead of Irma when USDJPY was at 107 and yields were below 2.02%. We’ve come a long way in terms of restoring some semblance of faith in the reflation meme, but now we’re back below that 2.40 line which everyone swears is important:

Yields

But obviously, the curve is what everyone wants to talk about:

2s10s

Sell the hike, buy the deflation. 

Second straight month of gains for the dollar after a truly abysmal stretch:

DXY

First back-to-back monthly gains for crude since last year:

Oil

One wonders if Poloz might have made a mistake after all (the latest evidence of a slowing economy came on Friday with Canadian GDP printing -0.1% in August)…

Canada

USDCAD on the month:

USDCAD

Canada’s economic surprise index lowest in a year all of the sudden:

CandaEcon

For all the turmoil, the IBEX actually managed to close higher on the month, its second straight monthly gain. Overall, European shares were up solidly in October:

EuropeStocks

Best month for the Nikkei in two years:

Nikkei

Of course the BoJ is on indefinite hold, so apparently the target is now infinity.

Bitcoin is going to a billion because now, apparently, the CME is going to launch bitcoin futures. Here’s BBG’s Camila Russo:

This paves the way for more institutional investors to enter the space. It could open the floodgates to investors who have been standing on the sidelines as bitcoin soared over 500% this year. The CME had prepared for this by starting a bitcoin index last year, and the futures will be settled in cash based on that index. The CBOE said in August it’s also planning to launch bitcoin derivatives and the CFTC registered cryptocurrency trading platform LedgerX as the first federally regulated cryptocurrency derivatives exchange and clearinghouse. With bitcoin futures becoming mainstream, the next logical step seems to be a bitcoin ETF, as the SEC had cited the lack of derivatives as one of the reasons for rejecting approval of the funds. ETFs and derivatives are likely to make bitcoin trading a lot more palatable for hedge funds and mutual funds, as the instruments will allow them to hedge for the digital asset’s volatility and avoid some of the hassles of investing in bitcoin directly.

BTCUSD

Absolutely nothing could go wrong with that.

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Finally, we are sorry about this.

Meth

It was a distribution mistake and the responsible parties have been dealt with accordingly.

Walt

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