HTZ ended lower?!
June 16, 2020
–Powerful stock rally off yesterday morning’s open continues. Reuters headlines tell the story: Fed launching new Main Street lending program; Treasury eyes $1T infrastructure plan to spur recovery; Fed buying corporate bonds. There’s a swirling negative conversation about Robinhood traders being swept into the vortex of social media investing, but at the Twitter open Davey daytrader (DDTG) said (paraphrasing) “What’s going on here is that the suits are trying to scare everyone about a second wave pandemic so they can scoop up stocks cheaper. That’s all it is.” It sounds like he was spot on. Treasuries settled modestly lower but lost further ground in the afternoon as stocks surged. Leon Cooperman was also on CNBC yesterday pointing out that stocks were fully valued at a 20 multiple, and warned that it would end in tears for the Robinhood crowd, but it seems as though stimulus is overwhelming all other investment decision inputs.
–EDZ0/H1 notched a new recent low at -9 bps. On the FF curve, Aug’20 to Jan’21 spread settled -4.0. This latter spread prices odds of an ease into the end of the year. I guess that’s what it prices these days… Powell speaks today in front of Congress, I’m sure we’ll be treated to many insightful questions from the Committee. On the long end of the curve I marked USU vol at a new recent high if 10.8 as the curve maintains a small steepening bias after Thursday’s drubbing.
–Retail Sales this morning expected +8%.
