First we had the revised Q4 2012 GDP print that took us from -.1 on consensus of +.5 to +.1, it's all semantics as far as the number goes, what's important when you are engaged in subterfuge is to accomplish a goal and a +.1 GDP as bad as it is, takes the pressure off Q1 GDP to print positive because 2 back to back negative quarters is a RECESSION, the "R" word is off the table for now.
Jobless Claims also came in this morning with a beat, but extended claims jumped.
| Released On 2/28/2013 8:30:00 AM For wk2/23, 2013 |
| Prior | Consensus | Consensus Range | Actual |
| New Claims - Level | 362 K | 360 K | 345 K to 387 K | 344 K |
| 4-week Moving Average - Level | 360.75 K | | | 355.00 K |
| New Claims - Change | 20 K | | | -22 K |
|
Then came Chicago PMI just a bit ago at an 11 month high as the US apparently takes over the lead in manufacturing from China. Chi-PMI printed 1.2 points higher at 56.8 (well above contraction) while consensus expected a print of 54!
This is good for short term sentiment, once they think about it a little more, it's bad for QE sentiment, but that's the retail side of things, lets look at what the Institutional side has been doing the last 2 days.
When a market is in "Risk on/Rally" mode, just about every risk asset should rally, but for the second (or is this the third ?) day in a row, CONTEXT's ES model is in territory I have never seen.
I don't think I've ever seen a differential of more than 20 since I've been watching CONTEXT for ES (S&P E-mini Futures).
*Leading Indicators are always compared to the SPX in green unless otherwise noted
Commodities should be in a risk on mood, they are not.
Yields should be following price, they are not
Last week it was all about currencies and how they were failing the market, here the Euro offers no support to the SPX.
HIO- High Income Fund has led the market at each of the last 3 peaks and is in the worst place right now.
High Yield Corporate which is used for a bounce because it is EXTREMELY Cheap compared to the SPX and it is EXTREMELY Liquid, but it too is now turning over.
Junk Credit trades like HYG above almost always
High Yield which doesn't see a lot of movement often is clearly negatively divergence with the SPX, as they say, "
Credit leads, stocks follow".
Get the picture? Price strength is VERY welcome today, I hope it keeps up the rest of the day.
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