Business

Submitted by Jeffrey Snider via Alhambra Investment Partners,

As one veteran trader told us, this massive short-squeeze came "out of nowhere," seemingly driven by oil-headline-induced algo momentum ignition. Goldman's "Most Shorted" stocks are up a stunning 6% in the last 2 days - the biggest 2-day surge since Oct 2015 as Credit Suisse noted earlier there is a "lot of pain being felt out there on the short side."

The face-ripping surge has sent "Most Shorted" stocks back into the green for the year...

Yesterday's strong 3Y auction was a harbinger. Despite the relentless risk on rally, moments ago the US Treasury had no problems to sell $20 billion in 10 Year paper which priced at a high yield of 1.765% (98.5% allotted), stopping through 1.6 bps through the 1.781% When Issued, the biggest gap since last spring, and well below March's 1.895%.

The bid to cover jumped from last month's 2.49, rising to 2.75, well above the 6 month average, and the highest since January.

At the start of the month we focused on what is set to soon be the new buzzword in economic circles: staglation. Specifically, we referred to the the explicit and inverse correlation between corporate profits and employee wages.

Via NorthmanTrader.com,