tyb
Market Report
Treasury complex gets hammered after rate cut, Stocks end lower, commodity's see the light(for now)
Volumes up across the board, since last Monday. The daily averages are now starting to rise as the "bigness" of last week and this, are starting to bring those back up. This will continue going forward-if you are not comfortable seeing this then don't watch it. It will all work out in the end..for us pepe's
Global equity markets slid on Tuesday and the yield on 10-year U.S. Treasuries fell below 1% for the first time after the Federal Reserve cut interest rates in an emergency move to shield the U.S. economy from the impact of the fast-spreading coronavirus. The Fed’s emergency 50 bp rate cut brought 10-year yields to fresh record lows and a 0-handle was realized. To a great extent, we’ll argue the situation didn’t play out exactly as Powell might have envisioned. It’s doubtful that when JP left home this morning he thought ‘50 bp will really crush the stock market.’ So it goes. In two short weeks the Committee will be faced with a very difficult decision of either underwhelming investors’ expectations or quickly utilizing the limited rate-cutting potential afforded by the low outright yield environment.
Once the effective lower-bound is established, expanding the balance sheet will become topical and if risk sentiment isn’t restored by dropping rates, the next tool in the policy box will be expanding the balance sheet-this is where a new QE program will be introduced but it will take the form of another four letter named bailout program like TARP or TALF or ….
But lost in much of the hype around the rate-cut was the fact that term and overnight repo liquidity exploded to its highest since the crisis began last September-See Cap#5.
As the Fed determines the next installment of accommodation, the signaling power for responding to Tuesday’s stock selloff will undoubtedly be a consideration; after all, the takeaway from the first 50 bp was that another will quickly follow and there is information held at the Fed which investors can only utilize by following the lead of central bankers.
They managed to get it up and back over 1%-BARELY- into the close but this is temporary at best
30Y TIPS yields crashed into negative territory for the first time ever.
Gold prices surged and the dollar sank as markets reacted to the Fed’s surprise cut of the federal funds rate by a half percentage point, to a target range of 1.00% to 1.25%. Yields on U.S. government debt fell across the board as investors grabbed Treasuries and other safe-have assets, such as gold, amid the uncertainty sparked by the rate cut. Gold soared higher today after The Fed cut rates, erasing last week's puke with futures tagging $1650 intraday…WTI traded up to $48.50 intraday, but ended back below $47.50.
newflash!!-they are caught-nothing they can do will combat the sheer size of paper products that this system has created-see the FRBNY repo process(s)-they do not have a big enough printing press for all of it.
Shares in Europe rose more than 2%, while MSCI’s all-country world index rose almost 1%. The Group of Seven finance officials said in Tokyo they would use all appropriate policy tools to achieve strong, sustainable global growth and safeguard against downside risks posed by the coronavirus. Gold surged. U.S. gold futures settled 3.1% higher at $1,644.40 an ounce. The dollar fell across the board. US markets were briefly exuberant after The Fed cut rates, then the questions began.
This has always been the case, well 9 out of 10 times, do not fall for the initial reaction to any FOMC policy change as it is usually a head-fake.
https://finance.yahoo.com/quote/%5EDJI
https://www.marketwatch.com/investing/bond/tmubmusd10y
https://www.kitco.com/charts/livegold.html
https://www.zerohedge.com/markets/not-so-super-tuesday-sees-stocks-yields-slammed-after-feds-shock-and-awe-fails
some facts taken from a few other articles as well
this just out a few minutes ago
ECB working on lending scheme for coronavirus-hit companies
https://www.reuters.com/article/us-ecb-policy-lending-exclusive/exclusive-ecb-working-on-lending-scheme-for-coronavirus-hit-companies-sources-idUSKBN20Q16W
World Bank Pledges $12 Billion To Combat Virus Outbreak
World Bank President David Malpass said there are still "many unknowns" about the fast-spreading virus. Malpass said more aid could be required in the future.
"We are working to provide a fast, flexible response based on developing country needs in dealing with the spread of COVID-19," he said."This includes emergency financing, policy advice, and technical assistance, building on the World Bank Group's existing instruments and expertise to help countries respond to the crisis."
He called on the global community to coordinate efforts to limit the transmission of the virus, indicating that the faster everyone acts, the more lives that can be saved.
Not sure if the World Bank is living up to "whatever it takes" or "throw the kitchen sink at it." Surely, this isn't the global fiscal stimulus investors were hoping for as stocks puke late in the session on Tuesday. It's almost certain that many more tranches of funding will be needed. This could be round one…
https://www.zerohedge.com/markets/world-bank-pledges-12-billion-combat-virus-outbreak
remember where David Malpass came from…Deputy Assistant Treasury Secretary under Ronald Reagan, Deputy Assistant Secretary of State under George H. W. Bush. He served as Chief Economist at Bear Stearns for the six years preceding its collapse
Thomas E. Donilon is Chairman of the BlackRock Investment Institute, not the Chairman of the Board.
Larry Fink is the Chairman of the Board at Blackrock
https://www.blackrock.com/corporate/biographies/thomas-donilon
yes. It will take time and the last three years plus is basically an accelerated synopsis of what they have done for decades.. They have to commit the crimes…they've done PLENTY but this is how it be. If I had to guess it would be a little farther away but taking into account the sheer volume of fuckery presently going on in the attempts to keep this afloat (them not POTUS) it could really be at any point after the election. Unless they have another plan to deal with all fo this prior but I give that a very low probability of habbening. Must consider everything.
ty anon- it's fun too.
one caveat. It should have imploded in 2008 but Pelosicrab bailed out the banks so they did not have any consequences. This was the public bailout of $750b-the one that got voted down first and they snuck it in on a sunday night/day. This set the stage for the big one we were not supposed to see. See enclosed for the Real bailout.
I'll start a bun if you need a spell in nb-have a little time. post on the you know what.
it's really an issue with the massive amounts of paper debt that are at low rates. This is not good for their system. Most stock, bonds, "products" are held by a small amount of people (in-size) the problem is that everyone's retirements/savings/assets are tied up along to all this fake paper. Watch what Deutsche Bank does, not says. The overall picture for our entire country is better than the rest of the world-their rates have been low for a lot longer. Money has to flow to keep it going and the most attractive place for that still is here.
will post it if needed, if no grab around 3 to 400 depending on speed.
o7