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A "Junky" Bull Market
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A "Junky" Bull Market

Short covering and speculation are driving this latest rally

David Rosenberg's avatar
David Rosenberg
May 14, 2024
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Early Morning with Dave
Early Morning with Dave
A "Junky" Bull Market
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Highlights

• Short covering and speculation are driving this latest rally

• Inflation is all that matters now (hard data be damned!)

• Policy misstep concerns are real

• Consumer buying conditions head backwards

While We Were Sleeping

We kick off the day with U.S. equity futures little changed after yesterday’s uninspiring session. European markets, in aggregate, are also down a touch. It was the opposite in Asia, mind you, where there was mostly green on the screen today: Taiwan (+0.6%), Japan’s Nikkei 225 (+0.5%), India (+0.5%), and Thailand (+0.2%). These were partially offset by dips in both China’s Shanghai Composite (-0.1%) and Hong Kong (-0.2%), while Korea and Singapore were flat on the day.

The FX market is mainly quiet (the DXY dollar index is up just a smidge to 105.3 but definitely looks to be topping out), and bond markets are enjoying a tiny bid (10-year T-note yield at 4.47%). It is a rough session for Bitcoin (-1.9% so far today to $61,898), while both the gold and oil prices are unchanged overnight. The data calendar was light — more evidence of a cooling in the U.K. labor market as the 3-month average of the jobless rate inched higher to 4.3% in March from 4.2% (though, curiously, YoY wage growth of the 3-month average actually ticked higher to +5.7% from +5.6%). All market quotes are time-stamped to 4:30 a.m. ET.

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