While the algos are closely following every momentum-generating uptick in global equities on the back of yet another short squeeze in crude, one asset class that has been roundly ignored are Treasurys, which have refused to follow the equity euphoria and have in fact roundtripped today's entire risk on move, suggesting that once again, "bonds aren't buying it."
For the longest time it was Wall Street's best kept secret: keep Unicorns - companies with valuations over $1 billion - hidden in their gilded stables (aka private) for as long as possible, and allow Silicon Valley billionaires and venture capitalists to overbid each other by investing modest amounts at ever more ridiculous valuations, permitting book-marking based on a handful private investment rounds to hit stratospheric levels and allowing the investors to take out loans backed by sky-high valuations as collateral.
On the heels of weakness in the rest of the world's PMIs, US Manufacturing just printed 51.0 (missing expectations of 52.4) and tumbling to its lowest since October 2012... followed rapidly by Bernanke hinting at QE3. While Markit does 'blame the extreme weather', it notes however that "every indicator from the flash PMI survey, from output, order books and exports to employment, inventories and prices, is flashing a warning light about the health of the manufacturing economy."
Not good...
Even worse...
Negative rates may not have found their way to bank deposits in most locales (yet), but that doesn’t mean the public isn’t starting to see the writing on the wall.
At first, NIRP was an anomaly. An obscure policy tool that most analysts and market watchers assumed would be implemented on a temporary basis in a kind of “let’s see if this is even possible” experiment with an idea that, from a common sense perspective, makes no sense.
WTI crude prices are up almost 6% this morning with April (the new front-month) trading above $33.50 - testing post-DOE plunge stops. The irony of the ramp is that it comes amid terrible global PMIs (demand), a report from IEA of oil staying in glut for longer than expected (supply), and warnings from Abu Dhabi's biggest bank that $20 oil is possible. Oh well, we are sure the algos know what they are doing... despite veterans of the 1980s oil glut warning it could take 7 to 10 years to emerge from the current slump.