By Tyler Durden
As discussed earlier, with most traders taking the next 1-2 weeks off for vacation, global markets remain on auto pilot, hitting new all time highs overnight driven by strength out of China where reflationary spirits have returned after industrial commodities surged on speculation that the PBOC’s recent attempt to contain excess liquiduity have failed (explaining the 3 consecutive days of reverse repo drains). Meanwhile, as SocGen’s Andrew Lapthorne writes, global equity markets continue to move higher, with both MSCI Developed and Emerging adding 0.4% last week. DM Is now up 12.4% in 2107 and EM an impressive 23.8% higher.
Most markets saw gains last week, with Europe playing catch-up, having tracked down or sideways for the last few months. In local currency terms, the Eurozone is still in negative territory over the last few months, but this is more than made up for by the strength of the currency, with the MSCI Eurozone index up 5% in USD over the same timeframe. That said there were a few soft patches. The Nasdaq was down, as was the S&P 500 on an equal-weighted basis. The Russell 2000 dropped 1.2%. Japanese small cap growth stocks also faltered with the volatile Mothers index …read more