Feb 8. Consumer Credit surges $19 bln in December
US interest rates moved higher yesterday, with ten year yield up 6 bps to 1.96 in front of today’s auction. 30 yr bonds auctioned tomorrow. The theme in options was put put buying and call spread selling, some appeared to be unwinding, but vol was better bid, confirming the price move lower. Gold jumped $25 in a nod to Bernanke’s comments which always indicate more liquidity for the cash strapped global economy. In a related development, Consumer Credit exploded by $19 bln yesterday and last month’s huge data was essentially unrevised. From BBG: “Consumer borrowing in the U.S. rose more than forecast in December, driven by demand for auto and student loans. Credit increased by $19.3 billion to $2.5 trillion.” That’s a lot of new Phoenix students and Chevy Volts. Of course, the spending (oops, not “spending” but “borrowing”) spree can be entirely explained by the jump in AAPL stock, up $100 or around 27% since late November, an increase of about $70 billion in market cap in two months. And BlackRock’s Fink is advising 100% in stocks!
–On the opposite side of the globe, (Business Insider quoting Nomura.) “data for January showed a shock 7.5% year-over-year fall in Chinese electricity consumption — the first such fall on record excluding the crisis.” The article concludes there was probably a large drop in industrial production.
