zerohedge.com / by Tyler Durden / 01/02/2014 07:12 -0500
The first trading session of previous years has always been a whopper for those betting on central planning and capital flows.In fact, if one adds up the S&P performance on the first trading day of each year going back to 2009 (i.e., 1/2/13: + 2.54%, 1/3/12: + 1.55%, 1/3/11: + 1.13%, 1/4/10: + 1.60%, and 1/2/09: + 3.16%), one gets a whopping 10% return just on that one trading session. Which is why the fact that futures are glowing read, if only for the moment, may be disturbing for index investors and all those others who put all their faith, not to mention money, in St. Janet. Today’s red open is hardly being helped by the 10 Year which continues to drift lower with the yield now at 3.04%, even as the Spanish 10 Year yield just got a 3 handle as well. At this rate the two streams should cross some time in the next two months. Just what a higher yield in the US vs Spain would imply for fair and efficient markets, we leave up to readers to decide.
In terms of macro events, while China’s official and HSBC PMIs as well as that of Australia posted modest disappointing declines, at 52.7, the final Euro area manufacturing PMI for December was unchanged from its flash reading (and the Consensus expectation) and rose by 1.1pt on the month. The German PMI was 0.1pt higher than the flash estimate, while the French PMI was 0.1pt lower than its flash estimate, a 7 month low. Manufacturing expanded on the month in Italy and Spain, and surprised on the upside in both. The trend of disappointing data out of France continues and the recent enactment of the 75% millionaire tax will hardly help. As for the credibility of the peripheral European data, well – check back in a year.