CNBC was awash with "Remain Calm" comments today as yesterday's carnage extended into today post-option-expiration misery.. "I would call this a rather stable sell-off" and stocks are "in a bit of a funk" were among them... but for those buying the well-sponsored rip post-Yellen, here's what you get:
“Christmas at my house is always at least six or seven times more pleasant than anywhere else. We start drinking early. And while everyone else is seeing only one Santa Claus, we’ll be seeing six or seven."
– W.C. Fields.
‘Twas the hike before Christmas, and all over the shopShort end traders were waiting for prices to drop.Bloomberg and Reuters, the FT all thereTo capture the moment – if Yellen would dare.
Perhaps in a recognition of the collapsing yield curve, and for sure in the face of the mainstream's bullish narrative on US banks in a post-rate-hike paradigm, Citi has announced plans to cut at least 2,000 jobs starting next month. Despite exuberance over higher rates, it appears Citi's CEO Michael Corbat wants to restructure some of the bank’s businesses.
Via Kessler Companies,
In a move that defines the word 'irony' better than the dictionary does, the Federal Reserve raised rates just five hours after their own Industrial Production series was released showing an almost certain entry into a US recession (see chart below).
This was not supposed to happen. Since The Fed raised rates the temporary (one day) stability in high-yield bonds has been obliterated. Across all sectors, HY bonds are being sold; the HY bond ETF is tumbling back to recent lows; and Energy spreads have surged to record highs. In a nutshell, it's not over yet!
Everything is being sold...
As HYG breaks key support...
And Energy spreads spike to recod highs...
As Energy Fwd P/Es begin to fall back to reality...