Corona virus rate of infection (deaths per infected person) increase continues trending down FROM .02096 on Friday to .02069 today I know these changes are minimal but they are trending in the right direction
More importantly the Central Bank Playbook is in Use More stimulus=Higher stocks “The PBOC injected CNY 500 billion or $71.2 billion into the country’s financial system on Tuesday, following a CNY 1.2 trillion in the previous day, as the authorities are trying to support markets amid coronavirus outbreak ( trading economics). The “Invisible hand” at Work in China’s Stock markets as the Shanghai gaped open lower this morning some 2+% and closed higher on day 1.34%.The CSI 300 gapped open lower by 3+ % but then rallied ,with help of the invisible hand to close higher 1.8%. Helping Risk on Sentiment is Tesla up 16% this morning trading above $900! There can’t be any shorts left can there be?? Stock +87% YTD!
Yields higher as Expected Interest rate Cut probability for June FOMC meeting now stand at 55% done form 79% on yesterdays close. Dow, Spoos +1.2% Nasdaq +1.5% Dax and Stoxx +1.4% All 19 Stoxx 600 sectors higher his morning led by Basic resources which are +3% as bounce in Commodities provide source of optimism Comex Copper+1.6% LME Nickel and Zink +~2% Steel rebar in China +2.4% Cl +2% Brent +1% as OPEC pledging to cut up to 1 Mln barrels of production. Soy +.8%, Cotton +1.8% as China says Phase one trade deal parameters do not need to be adjusted.
“The first four weeks of 2020 have seen the largest monthly inflows into bonds funds over the last 15 years. “Bernstein. Some Longs might be feeling a bit of pressure today nothing to severe Bonds down a handle ,Yield 2.05% +4 bps recall that 2% yield appears to be good support and 10’s 15 ticks lower, yield at 1.57% +5 bps on Day 1.5% also good yield support.
A few Notes of Importance:
• The US Federal Reserve for its part has announced Chairman Powell’s semiannual congressional testimony, testifying before the House February 11, and the Senate February 12. The Fed will publish its Monetary Policy Report for Congress on February7.
• No Winner declared in Iowa=Good for trump=Risk on??
• Australia Central bank left rates unchanged an issued a less Dovish then expected statement, Confidence that Virus will not cause as much damage? Sure thing Buy em up