Stocks and Bonds Continue to Diverge

Stock markets were broadly sideways today as we saw rallies in US treasuries and the Euro against the dollar. The most notable feature of this current market is the continued divergence between the US stock and bond markets.

The 10 year yield continues to fall

The 10 year yield continues to fall

5 year treasuries had a strong auction, pushing the curve even higher. Treasury futures were pushed up overnight by strength in the European bond market, especially German Bunds

Strong demand from the belly of the curve pushed the back end higher as well

Strong demand from the belly of the curve pushed the back end higher as well

Several stocks that had been beaten down saw a pop today, including QIHU, which has seen its price swing from over 120 to under 60. Today it rallied above 75 for the first time since mid September, only to give back some gains later in the day.

QIHU rebounded

QIHU rebounded

PCLN also saw its shares rise. It has now erased all the loses it suffered earlier in the month.

PCLN broke higher

PCLN broke higher

Shares of biohazard suit manufacturer LAKE rose today. No specific news to explain the pop as of yet, but it has been heavily shorted after rising as high as $29 share in October. It has seen its sales spike due to increased demand from fighting Ebola.

Lake rebounded

Lake rebounded

The yen arrested its decline against the dollar. Last night the BOJ released the minutes from its last meeting. Some governors expressed concern at the expansion of central bank assets.The yen stayed stable against the dollar

Gold futures rose slightly today. Through last week, gold declined 0.3 percent this year. The metal in 2013 tumbled 28 percent, ending a 12-year bull run. A second straight annual drop would mark the longest slump since 1998.

Gold whip-sawed but stayed in a range

Gold whip-sawed but stayed in a trading range

The e-mini S&P 500 futures sold off a bit in the morning, most likely profit taking traders trying to take advantage of the increased market liquidity on the open. Both GDP and  the Case/Shiller home index came in above expectations. Volume was below average which is to be expected as most traders are on vacation.

The stock market was sideways

The stock market was sideways

The Euro continued its slight rise against the dollar, following through on yesterdays move to the upside. The Euro has declined from a high of around $1.4 since May 2014.  

The euro continued a slight rally against the dollar

The euro continued a slight rally against the dollar

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