Bonds, Stocks, & Bullion Bid As Complacency Careens Beyond Dot-Com Highs

Stocks oscillated gently lower overnight then went wild as the cash markets opened, soaring all day but appeared to roll over a little when McConnell suggested slashing the liability protections and state/local aid from the COVID Relief bill (implicitly reducing the amount of free money to be handed out) and extended losses a little more when headlines on SCOTUS taking up Texas’ election case against MI, PA, and WI…

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Small Caps continued their rebound against mega-tech again…

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Source: Bloomberg

Another day, another massive short-squeeze…

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Source: Bloomberg

The SMART money ain’t buying it…

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Source: Bloomberg

“This is madness”…

Homebuilders got hit today…

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Source: Bloomberg

Bank stocks have trod water for two weeks now…

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Source: Bloomberg

TSLA managed to get green despite selling another $5 billion of stock…

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Notably, Cyclicals relative to Defensives continue to have stalled at a key level. Is it time to catch down to yields?

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Source: Bloomberg

The value rotation is starting to lag again…

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Source: Bloomberg

Despite stocks gains, bonds were also bid today – erasing all of the payrolls spike in yields…

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Source: Bloomberg

And so was bullion…

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Source: Bloomberg

But Bitcoin was sold back below $19k…

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Source: Bloomberg

As the dollar chopped around in a newly unusual tight range…

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Source: Bloomberg

Copper’s exuberant run higher relative to gold appears to have stalled out at key resistance. We’ve seen this before (cough Q1 2019 cough)…

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Source: Bloomberg

Finally, complacency has gone to ’11’ as the weekly Cboe ratio of volume traded in puts versus calls fell to the lowest since July 2000 just as the S&P 500 Index hit an all-time high.

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Source: Bloomberg

This implies extreme positioning to the upside, as investors look beyond short-term uncertainty toward a continuing global recovery in 2021.

And Greed is good-est…

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And Nomura Stock Sentiment is at its highest since 2004…

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What could go wrong?

Especially with global stocks over $100 trillion and massively extended relative to world GDP…

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Source: Bloomberg