Severe monetary tightening, seriously?

US equity indexes closed broadly higher, sp +22pts (0.7%) at 3025.  Nasdaq comp' +1.1%. Dow +0.2%. The two leaders - Trans/R2K, settled +0.8% and +1.2% respectively.

sp'daily5

VIX'daily3

Summary

US equities opened on a positive note, as Q2 GDP data came in within what is arguably the 'Goldilocks' zone. The US President didn't miss the opportunity to take a mild swipe at the Fed...

It will be interesting to see how Trump reacts to rate cut'1 next Wednesday afternoon. I'd imagine he'll say something like 'its a start... but rates are still too high!'.

The Kudlow made an appearance...



It was truly bizarre to see Kudlow deem fed action since Trump's election as being 'severe monetary tightening'. Seriously? Rates have only been raised to 2.25/2.50%, with a reduction in the balance sheet of $657bn (as of July 25th 2019).

These are indeed crazy times, where most have lost any degree of perspective. I don't think Larry knows he has been in the twilight zone for quite some years.

The afternoon saw equities lean upward, with the SPX and Nasdaq comp' both breaking new historic highs. Volatility remained subdued, with the VIX settling -4.5% at 12.16.

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A bearish Thursday

US equity indexes closed broadly weak, sp -15pts (0.5%) at 3003. Nasdaq comp' -1.0%. Dow -0.5%. The two leaders - Trans/R2K, settled -0.8% and -1.2% respectively.

sp'daily5

VIX'daily3

Summary

US equities were a little higher in pre-market, but just 5/10mins before the open... things turned red, and thus began a rather bearish Thursday. The afternoon saw some minor chop, but still settling on a weak note.

Volatility picked up, although the VIX remains at unusually subdued levels, settling +5.5% at 12.74. Friday is going to be real interesting, as its arguably a classic case of whether 'good news is bad news'.

Meanwhile...

It was kooky in early morning to see the CNBC scale for German bond yields doesn't go below 0.00%. We are very much living within the twilight zone. As things are, it'd seem the ECB will cut rates in September, institute some kind of 'tiered rates', and eventually... spool up the printers.
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Sunset between the storms

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Tears in Rain

 US equity indexes closed broadly higher, sp +14pts (0.5%) at 3019. Nasdaq comp' +0.8%. Dow -0.3%.  The two leaders - Trans/R2K, settled +0.5% and +1.6% respectively.

sp'daily5

VIX'daily3

Summary

US equities opened moderately weak, but there was an early reversal, with the SPX and Nasdaq comp' breaking new historic highs in the closing hour.

Volatility remained in melt mode, with the VIX settling -4.3% at 12.07. S/t equity price structure is an ascending wedge, and leans to s/t cooling. Tomorrow is Thursday, which inherently leans to the bears. With the ECB in early morning, and further earnings, it should be enough to keep most awake!
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Meanwhile...

Whilst many are focused on the very s/t, JPM's Michele is boldly touting the US 10yr yield to drop to 0.0% percent 'within a few years'. I have to agree with that.
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Blade Runner is a personal favourite...



Hauer was a superb actor. He did a man's job. Finished. 
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Extra charts in AH (usually around 7pm EDT) @ https://twitter.com/permabear_uk

Goodnight from London
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If you value my work, subscribe to my intraday service. 
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