The RUT is back to 1000 (All time highs around 1008).
The S&Ps are back to 1654 (All time highs around 1657)
The Mini Nasdaq is back to 3000 (All time highs in March 2000)
The DJIA is back to 15,325 (All time highs 15,515)
Besides the Nasdaq, the equity markets all topped last time Bernanke was in front of a microphone on May 22, 2012. Here is his testimony from that day.
Equity markets had a key reversal on 5/22 following this:
BERNANKE ON EVENTUAL EASING FLOW OF ASSET PURCHASES:
"The program relates the flow of asset purchases to the economic outlook. As the economic outlook - and particularly the outlook for the labor market - improves in a real and sustainable way, the committee will gradually reduce the flow of purchases.
"I want to be very clear that a step to reduce the flow of purchases would not be an automatic, mechanistic process of ending the program. Rather, any change in the flow of purchases would depend on the incoming data and our assessment of how the labor market and inflation are evolving."
BERNANKE ON TIMING OF ADJUSTING PURCHASES:
"If we see continued improvement and we have confidence that that's going to be sustained then we could in the next few meetings ... take a step down in our pace of purchases. If we do that it would not mean that we are automatically aiming towards a complete wind down. Rather we would be looking beyond that to see how the economy evolves and we could either raise or lower our pace of purchases going forward."
"I don't know" was his answer when asked if purchases would be lowered before the Labor Day holiday, which is Sept. 2.
Some other "highlights" (or lowlights depending on your QE Forever views) can be found here.
Macro, I found the following table to be interesting
As far as China goes, I found this interesting:
I'm of the opinion that China is NOT about to go into a tailspin, but I increasingly feel like a minority in that belief. Plus their yield curve is seriously inverted which generally doesn't bode well.
Domestically, this is another example of the Fed's Transmission Mechanism not working according to "textbook":
I often show the startling LACK of velocity of money, hence "growth" if you're happy with 2% GDP with no inflation. Right now the market sees nothing but "good" inflation (Asset prices are higher, Home values are higher). The "bad" inflation is if/when food and energy prices start moving up quickly.
Here's a visual on 5 Year TIPS which started moving up (quickly) on 5/22.
And here is a reminder of how active Central Banks around the globe remain....because GDP "growth" has been tethered to Central Bank interventions/Government spending.
Things of interest/recent activity:
- Sold August Puts in Natural Gas
- Have July 5th (expiration) 136 calls offered above in the Euro
- Looking for a level to get Long August Gasoline v. Short August Heating Oil (targeting 12.50 wide)
- Aggressive types could look for short delta plays in Crude Oil around $99.00
On the May 1st FOMC meeting the Dollar Index bottomed, Crude made short term lows around 91, Copper made 52 week lows (3.05), and the 30 year bond essentially made an ALL TIME HIGH. (30 year rates made all time lows around 3.28%). Since then, rates have popped considerable.
I don't know what tomorrow may bring. My gut says the "Taper talk" is overdone and the Fed will strike a more Dovish tone than the market expects, but it's difficult to position based on that belief. This is a TRADING market as opposed to a BUY and HOLD. You still need to keep an eye on the Nikkei and JGBs. Be discriminating, be unemotional, and size it right. Easier said than done.
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