September 10, 2013
The last 2 days market reaction has been one of war-premium reversion for all asset classes. Oil has tumbled back this mnorning to around $106.50 (its pre-Kerry level) also in line with the USD which has fallen back to unchanged from that initial warmongery. European stocks remain the big winner – up 3.5% since Kerry started but today’s rise in stocks lifts the S&P to +1.5% from 6/27 (so no war and we don’t care about Taper). It seems, however, that the safe-havens are having the war premium sucked out and reality of a SepTaper pricing back in. 10Y Treasury yields are back above 2.96% (with 30Y bonds -2% in price from Kerry) and Gold and Silver are tumbling (-3.5% and 5.9% respectively from Kerry’s initial ravings). Now, should we worry about crossing 3.00% again (and the surging cost of capital that will crimp consumer spending and corporate buyback abilities)? Or does that not matter now that war is off the table for 10 minutes?
From Kerry’s initial war-mongery…
The last week in bonds and stocks…
This article was posted: Tuesday, September 10, 2013 at 11:16 am