Feb 4. CRB and SPX…identical moves since QE2
Feb 4. Once again interest rate futures were pounded, with green euro$ pack down almost 10 bps…down 22 bps in two days. Ten year note has been in a range of around 3.28 to 3.53 for the past two months, but ended at 3.54..clearly probing for higher yields. New highs in red/green euro$ pack spread over 119 bps.
–Bernanke spoke yesterday, glad to take credit for QE2 in that stock prices were juiced, but denying any culpability for the concurrent rise in commodity prices. I ran a chart of the SPX overlaid with CRB, and they both started their recent rise around August, when hints of QE2 began, and tracked identically upward since then (chart attached). If I told as blatant a lie as Bernanke did to the National Press Club, my mother would have slapped me. Right…there’s no inflation, unless you eat rice (new high) or put gas in your car. Interesting that as soon as Bernanke began his speech gold shot up $20.
–Employment report today expected 146k with a rate of 9.5%. The market trades as if NFP will be much stronger, which wouldn’t be so surprising as Job Claims have trended lower. There’s an item on Bloomberg that Google, having announced intentions to hire 6000 people, received a record 75000 applications in a week. Currently the company employs just over 24000.
