Corp. Bond Buying Infrastructure Stimulus Send Stocks Soaring
GFBP and Settles for 6 15 20
As we noted earlier the SP500 hit that 50eMA down at 2923 during the Asian session overnight and promptly on the European open stocks went full Momo bid and never looked back:
The 3113 level in the Sept. futures has been hit tonight as of this writing and its the first stumbling block to this never ending bid given its the 61.8% retrace from the recent high to low.
Crude Oil came very close the other day to shutting the gap at 41.05 from early March and we suspect its too juicy of a level not to hit and thus any attempt above 38 should see a decent continued probe to get that thing closed:
It shouldn’t come as a surprise given the never ending check book and rhetoric out of the FED these days, to see the US Dollar give back some ground. Looking back, the US Dollar is still stuck within a 96/101 band and we highlight the moves over the last few months in the graphic here:
We can’t help but think all that new found Cares Act money has made its way into the gambling halls of Robinhood, TD and the like as noted by this graphic:
Solidifying the HFTs constant need and never ending supply of fast dumb money to fleece. Who knows maybe they will get lucky and the FED will continue to backstop everything and everyone wins right?
Speaking of winning and front running this next graphic shouldn’t come as a surprise given all that savings and of course back stopped HY ETFs, front running made easy:
Even the overnight funding continues to be well liquefied as Repo’s continues to average some $67.5 Billion over the last 5 days:
We can’t help but think that there truly is no limit to the amount of US debt, oh wait, we have this chart, #gotgold anyone?
Maybe there is a limit, maybe people just don’t realize it, inflation, deflation, whose counting. There’s riots, there’s “Autonomous Zones”, there’s MMT talk, infrastructure talk, renewed Covid talk, all just seems like a major distraction to the reality that truly exists out there that lies in plain site, but often goes fundamentally unnoticed by the masses. Life has a way of inundating, overwhelming and rationalizing irrational behavior. DON’T FALL FOR IT!
Sensibility doesn’t always win, sometimes chaos causes very smart people to do very dumb things and we hope that you recognize that the polarization out there is highly destructive toward civil society and the social contract. Just because equities rally and rally doesn’t mean that value exists, it only means things are getting more expensive or your dollar is worth a whole lot less, so I guess your perspective all depends on which side of the bed you woke up on.
As far as the GFBP Position Tracker, it continues on narrowly within the Hedged Short structure. Although we aren’t convinced that this won’t change given tomorrows action especially if we see another parabolic rise in equities. We also are monitoring the dollar a bit tighter and are very cognizant of a break out of the range. Bonds went no where today although tonight they are selling off a bit and will have to see how they end up late tomorrow. Anyway here is the data for the end of day today:
Finally today’s settlements of the markets we follow:
-Magnelibra Econemotions
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