Market breadth momentum contonues to weaken as the S&P 500 grinds higher, setting up a bearish outcome similar to the early November 2015 top. As BofAML's Stephen Suttmeier warns a break below channel support at 1989 would signal an interim top.
With the market already pricing in dramatically fewer rate-hikes that the "cheerleading" Fed, Deutsche Bank expects the USD to respond favorably to the FOMC’s signals on Wednesday, contrary to the pattern seen after the last four FOMC meetings with press conferences.
The waning influence of the Fed’s projections is showing up in derivatives markets. After the December revision to the projected path of interest rates, traders responded much less than they did earlier in the year in the market for derivatives known as overnight-indexed swaps.
Submitted by David Stockman via Contra Corner blog,
Talk about sheep being led to the slaughter. The S&P 500 is up 11% from its February 11th intra-day low (1812) because Wall Street still has inventory to unload. That much is par for the course.
One of the biggest false narratives pitched by the mainstream to mitigate concerns about a global recession, is that even as China's massively overlevered manufacturing sector is careening into a hard landing, China's "strong" consumer base will keep the country's economy afloat (a narrative shared with the U.S.), even though as reported over the past weekend retail sales soundly disappointed expectations, while the latest proxy of China's consumer strenth, namely "record" box office receipts, was recently uncovered to have been - like everything else in China - mostly fabricated.
Last September, in the aftermath of Sweden going full NIRP, we warned that "Sweden Goes Full Krugman, Gets Massive Housing Bubble", in which we showed the unprecedented surge in Swedish home prices, which have been the one asset class to "benefit" the from the Riksbank's ultra loose monetary policy hoping to stimulate inflation, even as overall inflation has failed to materialize.
Since then things have only gone more surreal, and the chart below shows what has happened to Swedish home prices in recent months.