S&P 500

In light of the dramatic spike in interest rates since the Trump victory, where as we reported yesterday and as Bloomberg comments overnight, "yields on benchmark 10-year Treasuries posted their steepest back-to-back weekly increase since 2001" leading to the "the worst rout in the fixed-income universe in 15 years"...

... and which coupled with a surge in the 10-Year breakeven rate - a gauge of US consumer price expectations - to the highest in more than 18 months...

In light of expectations that the Trump fiscal stimulus plan will unleash a new Golden Age for the US economy, driven in part by the repatriation of hundreds of billions in funds held offshore, yesterday we showed a disturbing analysis from Citigroup according to which the bank's share-shrinker portfolio has soared relative to the S&P following the US election. The implication was clear: as fas as the market is concerned, much if not all of the capital repatriated from overseas will be promptly returned to shareholders, and maybe much of the corporate tax cut as well.

Via Dana Lyons' Tumblr,

Near-term volatility expectations have plunged to record lows.

Submitted by John Mauldin via MauldinEconomics.com,

It’s quarterly report time for US stocks. If you just casually glance at the earnings news, you might think companies are having a great year. Many are beating expectations and reporting impressive revenues and profits.

The markets reward companies for meeting expectations (as we shall see below). But the reality is that the S&P 500 is on track for a sixth straight drop in year-over-year earnings.

It has been more of the same this morning as the dollar extended its advance on the still undeteremined Trump reflationary policy measures after Yellen signaled an interest-rate hike could be imminent, while bond yields around the globe rose again, metals declined,  European stocks advanced and futures were modestly in the red just shy of all time highs.