10Y dollar Dow emerging markets euro europe eurostoxx FX high yield nasdaq ripple russell 2000 S&P 500 theresa may

Sign Of The Times.

Well, in what we can only describe as a sign of the surreal times in which we live (and trade)...

Well, in what we can only describe as a sign of the surreal times in which we live (and trade), a lot of the news flow on Monday revolved around Ripple and Oprah.

With regard to the former, the bottom fell out at roughly 10:00 a.m. ET when what was, until recently anyway, the second-largest cryptocurrency by market cap abruptly collapsed by something like 30%:


“The reason Ripple is surging so much is it’s a bubble,” Erik Voorhees, CEO of digital asset exchange ShapeShift said, adding that “testing crypto with banks doesn’t make sense. The whole idea of crypto is you don’t need banks.”

Bitcoin dove around the same time before partially recovering:


All of this comes amid headlines tied to South Korea’s investigation of cryptocurrency exchange accounts at banks. That inspection (discussed here at length on Sunday) began today.

On the Oprah front, it looks like she may run for President. So there’s that. You can read more here and here, but suffice to say the mere suggestion that an Oval Office run is in the cards was enough to send Weight Watchers soaring on the way to logging its best day since last August (thus making Oprah richer in the process, which is amusing):


U.S. stocks were higher with the S&P and the Nasdaq closing at all-time highs, although generally speaking, this was a lackluster session. For whatever it’s worth (which is probably not much), Stifel was out today with this:

A fairly rapid rise in Treasury and corporate yields will cause a 5% correction in the S&P 500 in 1H.

The dollar got a much needed reprieve after posting its third losing week in a row (four in a row for the BBDXY). Here’s some perspective that includes the knee-jerk to the payrolls miss on Friday:


Treasurys were mixed on the day.

Emerging market currencies snapped an 11-day win streak as the greenback regained its footing and gold slipped as well on dollar strength. just two out of the two dozen EM currencies tracked by Bloomberg advanced.

Meanwhile, EM equities managed to hold up reasonably well despite the dollar strength and are now sitting near a seven-year high:


They’re overbought:


But as noted earlier, so is everything else.

Here’s a random one – the Amazon VIX is rising as the shares rise:


Worst day for the euro in at least six weeks (the common currency is of course riding a hot streak and is coming off its best year against the dollar since 2003 with spec positioning stretched to extremes):


As a reminder, Germany is engaged in critical talks aimed at reviving a Grand Coalition and breaking a political stalemate.

European shares were marginally higher on the day, but the FTSE lagged as Theresa May’s woes continue:


This is the best start to the year for European equities since 2013.

Oh, and here’s a funny one to end on. HY has already rallied more this year than JPMorgan predicted for the entirety of 2018. Back in November, the bank said it sees 20bps worth of tightening this year. Through January 5, the Bloomberg Barclays HY index tightened by 21bps:




1 comment on “Sign Of The Times.

  1. Delusion and illusion prevail.

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