It was risk-on all the way to start the week as Wall Street took its cues from Asia and Europe where stocks jumped amid what everyone is calling “optimism” about the U.S. tax plan. That would be the plan that almost no one in America really wants.
Well, I shouldn’t say “no one”…
As the world watches, we are days away from passing HISTORIC TAX CUTS for American families and businesses. It will be the BIGGEST TAX CUT and TAX REFORM in the HISTORY of our country! pic.twitter.com/EvcAkjuf8w
— Donald J. Trump (@realDonaldTrump) December 18, 2017
For noted equities strategist Kellyanne Conway, correlation always equals causation …
Not yet tired of winning.
This is called causation, not coincidence.
Thank you, @realDonaldTrump.
— Kellyanne Conway (@KellyannePolls) December 18, 2017
The Nasdaq hit 7,000 intraday:
Notably, the S&P has now gone 69 consecutive sessions without a 1% move in either direction:
As for the dollar, it’s all “buy the rumor, sell the news”:
Treasurys bear steepened as 30Y yields surged:
European shares staged a broad-based rally with the DAX leading the charge. All 19 Stoxx 600 sectors rose; 535 Stoxx 600 members logged gains.
The VStoxx dove 10% and an intraday record low, as volatility continues to collapse across the globe:
In Japan, the Topix rose 1.4% to its highest level since 1991:
Best day for the Nikkei since November 7:
Notably, the Chilean peso and the rand soared on election optimism. I’m not a peso aficionado, but that looks like the best day since June of 2016:
The rand jumped on Cyril Ramaphosa’s ANC victory and there for a minute, the currency was having its best day in something like two years. South Africa’s CDS spreads fell 9bps to 164bps – that would be the lowest level in three years. This is probably the easiest way to capture things:
Of course this was yet another day dominated by Bitcoin news flow. The CME futs started trading on Sunday evening (full recap). Here’s how that’s going so far:
Stay tuned tomorrow for more of the same as everyone makes up excuses to engineer a Santa rally.