“Hell for investors, Paradise for Traders”
Felix Zulauf (1986 & 2025)
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And suddenly, the mighty S&P 500 is less than two and a half percent away from a new all-time high!
It seems that post-election gap closure that happened on Monday and we discussed in this space on Tuesday, was pretty darn important:
Yesterday, stocks steamed ahead on a trifecta of good news:
First and foremost, CPI did not bring an upside surprise as many feared, relaxing bond markets substantially
Excellent Q4 results from US big banks
Ceasefire announcement in Gaza/Israel.
The truth is of course that the broader market, for example simply measured by the equal-weight S&P, still has further to go reach previous highs:
But still, an advance-decliner ratio of nearly 3:1, coupled with the observation that for a third consecutive day more stocks hit a new 52-week high than a fresh 52-week low.
Bond markets, as forementioned, saw an important bounce in prices, as yields retreated post the more-benign inflation reading than feared. The US 10-year Treasury yield saw its biggest bp down move since August of last year:
That translated into a one percent price jump (that’s big for bonds, believe me) on the iShares 7-10 year Treasury ETF (IEF):
As avid QuiCQ (and hopefully Quotedian) reader, and hence having a deep understanding of the cross-asset impact of macro events, you will have already guessed that the Dollar may have seen some weakness yesterday:
Well, yes, but maybe only a bit disappointingly so …
The Japanese Yen definitely had a good day yesterday, where USD weakness was reinforced with JPY strength, after BoJ members, including Governor Kazuo Ueda, upped their positive outlook rhetoric, pushing up yields and the Yen along the way.
Asian equity markets are mostly up this early Thursday, though probably to a lesser extent than investors into the area would have hoped for post the two standard deviation Wall Street rally. Equity futures point to a friendly opening to European and US cash trading later on.
Focus of the day is likely Treasury nominee Scott Bessent’s testimony later this afternoon. Watch the yield space closely…
Below a tweet (or an X) from the incoming US president, as a reminder of how much “fun” is expecting us marco-aware investors:
I repeat the quote from the top of today’s QuiCQ:
“Hell for investors, Paradise for Traders”
Felix Zulauf (1986 & 2025)