Last week we reported that for the first time since the election, Bank of America's smart money clients were, as a group, selling stocks. As BofA's Jill Carey Hall calculated, after significant buying over the past few weeks, net client sales of $2.1 billion were the largest since June. However, there was a further nuance, one which has emerged as troubling for those calling for sustained gains in the market.
In its latest annual letter, released at 8am on Saturday, Warren Buffett’s Berkshire Hathaway said Q4 profit rose 15% as net income increased to $6.29 billion, or $3,823 a share, from $5.48 billion, or $3,333 the previous year, while operating earnings, which exclude some investment results, were $2,665 a share, a slight miss to the $2,717 consensus estimate.
Mnuchin hit the reset button and then asset gatherers spent the day like this...
The Dow topped 20,800 shrugging off any fears from Mnuchin...thanks to a VIX slam...
Quick... look over there..
http://www.youtube.com/watch?v=FsqJFIJ5lLs
The Dow was the only major to close green today... (DD and MMM created 35 points of The Dow's 32 point gain)
The Dow has notched its 9th record close in a row - the longest streak since Jan 1987...
The US equity market and VIX have now been decoupled for 8 trading days... (closing higher with stocks for the 2nd day in a row)
With the S&P making new all time highs on a daily (and hourly) basis, and the VIX just why of all time lows, one has to look hard to find something that is amiss with the "market." Which is precisely what SocGen's Andrew Lapthorne did recently, and in his latest report he warns that global indices hitting all time highs is "disguising an underbelly of trouble."