Dow Record Close Despite Bond Yields, Bullion, & Black Gold Battering
Despite the best efforts of business media to paint a rosy picture of the Black Friday spend-fest, stocks had only one trajectory - from upper left to lower right - from the open. Small Caps were slammed but all major indices gave up significant knee-jerk "energy schmenergy" gains to close ugly. However, The Dow was pushed just into the green - and new record highs - to prove everything in the centrally planned world is awesome. Crude oil prices were monkey-hammered to 5-year closing lows. The USDollar gained on the day - after 3 down days - and combined with Swiss referendum expectations, gold faded notably (as did Silver with oil). Treasury yields tumbled 10-12bps on the week and HY credit notably underperformed.
Ugly day for stocks...
As the week's gains disappear...
Stocks decoupled from USDJPY
Credit markets were hit hard today - driven by HY energy collapse
While stocks were ugly, it was commodities that took the proverbial biscuit today...
As the dollar rallied from OPEC's decision after 3 down days...
Treasury yields plunged...
Charts: Bloomberg
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Oil weakness is a godsend for the Federal Reserve which will keep inflation at bay for a while enabling continued easy money policies. However, their actions have destroyed any hope of a solid recovery this upturn which is rapidly coming to an end. This will hit home when the end of the business cycle concludes and we are roughly in the same place that we were when they started this mess. That's what happens when you try replacing capitalism distinctly socialistic actions like QE, effective government takeover of the housing market and nationalized companies, state sanctioned and protected banking, and massive increases in costs to businesses which Obamacare is whether the government wants to call is something else or not.