Bernanke-Based Buying Bonanza Buoys Bonds, Bullion, And Boeing-Less Stocks

Even with duelling Fed members today (Bullard vs Plosser) the message from ‘the man’ led markets on a one-way street all week. Even though Boeing impacted the Dow (and Trannies):

  • S&P managed its best week in 6 months (+2.6%);
  • Gold’s best week in almost 8 months (+5.1% or $62);
  • Treasuries’ best week in 13 months (10Y -14.5bps);
  • High Yield bonds best week in 20 months (+3%); and the
  • USD’s equal worst week in 21 months (-1.8%).

VIX remains modestly bid and IG credit spreads are underperforming. Market breadth today was weak as S&P volume was low and the intraday range the lowest in 5 months.


Before we discuss the exuberance, let’s look at what dragged down the Dow (and implicitly the Trannies) today. Boeing hit the Dow for a loss of 40 points – but that didnt matter as the algos had only one mission – a green Dow!!!


Boeing saw its heaviest volume day ever, falling over 4.75% on the day (settling at VWAP as institutional orders hit)


Of course it wouldn’t be US equity markets withouit the late-day – seemingly Bullard-driven volume-less – vertical ramp job in stocks… a pure algo-driven stop-hunt just for shits and giggles… AND S&P futures collapse back to VWAP after hours – total fucking lunacy in the indices…



The S&P’s best week since the first week of the year…


Gold’s best week in almost 8 months…


Treasuries’ best week in 13 months (after exhibiting some JGB-like Fed-has-lost-control volatility over the past few weeks… 10Y -14.5bps, 7Y -21bps (but the whole complex sold off 8bps or so from the US day-session open)


which is intriguing given the extremes in sentiment… (h/t @Not_Jim_Cramer) with the bullish view having troughed in August 2012.


High yield bonds best week in 20 months…


and the USD had its equal worst week in 21 months…


Homebuilders were best on the week (+5.7% – best week in 3 months) and while all sectors were green Energy, Tech, and Financials were the underperformers (still up around 2.3%)


VIX remains bid as it seems not everyone is buying the idea that this all-time high close break is the sign of another leg higher…


Charts: Bloomberg

Bonus Chart: This is the best 13 day run in the S&P since October 2011; that time the S&P 500 lost 140 points in 2 weeks following…


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