S&P futures are little changed as the Fed begins its two-day FOMC meeting pushing the VIX below 10, down 1.3% and falling for the 7th day; European shares are lower as is the dollar while Japanese stocks soar on the back of a tumbling yen as a snap election in Japan now appears imminent. Despite the cautious action ahead of the Fed, the The MSCI All-Country World Index rose 0.1% to a new record high.
Last week's bullish sentiment that sent the S&P not only to a new all time highs, but a burst of last-second buying pushed above 2,500 for the first time ever, has carried through to the new week, with European and Asian shares rallying across the board, US futures again the green, and world stocks hitting a new record high on Monday ahead of a historic Fed meeting in which the FOMC is expected to announce the start of the shrinkage of its balance sheet.
On Thursday, just as the S&P hit its latest all time high, the broad US equity index surpassed the 266% increase recorded during the 1949 to 1956 bull market from its March 2009 "generational lows", in the process becoming the 3rd strongest bull market - artificial and central bank-driven as it may be - in history.
It also prompted Citi to calculate the odds of an imminent market correction (one starting in the next 3 months) at 45%.
“Volatility is an instrument of truth," proclaims Artemis Capital's Chris Cole in a wide-ranging interview with The New York Times, warning that "the more you deny the truth, the more the truth will find you through volatility."
So to be clear, this week we had:
And the result - drum roll please - new record highs for The Dow, The S&P, and The Nasdaq... with The Dow's best week of the year!!