Must.Stay.Green.In.May…
So despite weaker than expected GDP, and tumbling GDP expectations…
Yellen has jawboned rate hike expectations up to record highs for July…
And stocks loved it!??
Stocks had their best week in over 3 months – mainly driven by a panic bid on Tuesday as Fed speakers went full hawktard…
And here are futures this week… just unreal…
As S&P cash was squeezed up toward 2,100 and VIX near a 12 handle once again… #FAIL 2098.87, and 13.10
So to be clear, The Fed signals as loud as possible that rate hikes are coming to ensure it has ammo "in case of a shock," everyone proclaims that The Fed is stirring up volatility…and VIX collapses?!
For now it looks like the short-squeeze has stalled…
Volume was non-existent.. even for a pre-Memorial Day market…
Yen plunged on the stronger dollar inferred by Yellen's hawkishness – catching up to stocks…
Treasury yields ended the week (early) 1-3bps higher with the short-end underperforming…
As 2s30s plunged after Yellen's comments to end the week 2bps flatter…
So Buy Banks!!??
Stocks and bonds decoupled from the close of Europe on Tuesday… one wonders if Yellen called Draghi again?
The USD Index managed to scramble back into the green for the week after Yellen spoke as EURUSD tumbled to 1.1100 – 2 month lows…
Commodities were mixed despite the gains in the dollar with crude and copper strong and PMs weak…
Gold fell for the 4th week in a row (for the first time since Nov 2015) and dropped over 3% on the week (the worst week since October)…
Charts: Bloomberg
Bonus Chart: For all those claiming there is money on the sidelines or that this is the most-hated rally… Net Longs in S&P Futs and minis are at their highest in 18 months…
h/t @DonDraperClone
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