Stocks Fly To Records, Global Risk Rally Continues As Bad Data, ‘Good’ Yellen Keep Hope Alive

The message is loud and fucking clear: the vol. seller’s/ carry trader’s paradise and the risk party that’s made every homegamer with some SPY and QQQ look like a guru for the past eight years depends on DM central bankers staying some modicum of dovish. And on that score, bad data helps.

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That’s Not Low Volatility, THIS Is Low Volatility…

We both agreed that while suppressed equity vol. grabs all the headlines, it is in fact credit’s Teflon performance that wins the John Gotti prize for “most bulletproof asset class.” 

One Trader Won’t Tell About The Aliens In His Basement, But He’ll Talk About Price Sensitivity

“Rather, as we ponder the notion of a global regime change in monetary policy, and rates more broadly, it’s a big mistake not to consider that at some point issuers will be fighting to tap into a far more selectively inclined investor base.”

If This Is The Big One, ‘You’re Going To Have To See It Here Too’…

“Do as we say in rates and do as we do in credit” – or something.

Trader: ‘Stocks Might Even Go Down. Stranger Things Have Happened’

“So the question you need to be asking isn’t whether something is mispriced, but what are the catalysts that will convince the market that it’s time to recognize it as so.”

This Could End With “Large Retail Investor Outflows From Bond ETFs”

If you are a credit investor, you should be worried right about now. For one thing, you could be a hermit whose only connection to the outside world is a chart of IG and HY credit spreads that updates daily and still know it’s time to take some off the table. The spread compression off…

And The “Biggest Risk” To Credit Markets Is…

“Oil can be an issue this summer if prices fall below $40/bbl, but we are more worried about…”

Barclays Sarcastically Asks: “What Could Possibly Go Wrong?”

“The reality is that there are many risks on the horizon as we write”…

This Is The “Most Vulnerable” Index In Credit To Macro Risk

“Quite in contrast to the past couple of years, this index now appears to be the most vulnerable to macro risks compared to other benchmarks in credit.”

“Hakuna Matata”?

“In our opinion, this is not dangerous market complacency but a reflection of an abnormally tranquil macro environment, with a benign economic outlook, very supportive financial conditions, and lower political risks”…

Chart Of The Day: Asset Prices In The Trump Era

See if you can spot what’s still hanging on for dear life at record highs/tights despite lackluster incoming data and central bank tightening…

While You Were Watching The VIX, Credit Did This…

“While the collapse of the VIX to multi-decade lows has garnered headlines recently, implied volatilities on US and European credit indices have quietly reached new lows as well. The one-month at-the-money implied volatilities on US and European credit indices have all collapsed to their tightest levels since 2008.”

And Credit Investors’ Biggest Worry Is…

Spoiler alert.

Just 3 Charts…

Spot the odd one out…

BofAML: “Warning: If US Rates Market Is Right, Everything Else Is Mispriced”

“The fact that UST 10y rates have traded in a very tight range for the last two months has been interpreted as a reassuring signal for carry trades everywhere. In fact it should be a warning signal.”