In case you’re keeping score, last week was supposed to have been the most momentous week ever for the global equity and bond markets. All kinds of huge stuff was happening – the largest IPO in US history was supposed to slam the markets as it sucked up capital, the iPhone 6 and its giant screen launched with Apple near all-time highs, Scotland voted on independence from Great Britain, the Fed’s final press conference before the wrap-up of QE, the beginning of offensive airstrikes against the new Iraqi-Syrian terror-state, etc.
But for all of these happenings, the bond market was flat, the S&P and EuroStoxx 50 dribbled up a point and a quarter, Japan had a good week, EM stocks dropped half a percent, the Vix dropped back down to 12 and the dollar rose slightly against the basket. In other words, par for the course – nothing to see here.
Eric Peters captures the entirety of the global non-happening this week in his excellent ‘wknd notes’ piece:
Overall: What the hell? Nothing happened? Seriously? Scotland’s British? Some crappy little concept-country called Catalonia collapsed? The sun rose? Then set? Yup. And that’s not the half of it. Yellen kept her “considerable period” language in the Fed statement. Which means nothing. Don’t believe me? Just ask her, she admitted it, she’s “data dependent.” But still, had she removed “considerable period,” like for real, well, all sorts of crap might’ve potentially happened. Maybe. But of course it didn’t. Nothing happened. Other than 1mm man-hours were again utterly wasted, parsing her words.
Anyhow, obviously nada happened in Europe. Draghi’s prosperity indicator collapsed; 5yr/5yr inflation swaps hit 1.9% – and before you think new lows means something happened, remember it makes new lows every couple weeks. Switzerland did nothing. Which surprised the masses, who’d eagerly anticipated something new; like negative interest rates. Can you even imagine that? Well, there’s no need to, not yet. Abe wrote a WSJ op-ed, promising his rising sun ain’t about to set. Banzai! Which is nothing new. Desperate politicians always turn to printed-paper for salvation (how classic was Putin’s tactfully-timed Sept 11, 2013 op-ed, “A Plea for Caution from Russia”). Peking’s acrobats eased. Which they do whenever their spinning plates slow. And wobble. Which they’ll do for years to come, now that their gravity-defying stunts have hit the natural limit of large numbers.
Of course, global stocks made new highs. As every trader now knows unequivocally, that while world leaders have no clue how to govern, they sure know how to inflate equities. So as long as nothing happens, it’s giddy-up. Until of course, the day comes when nothing happening is seen for what it actually is. Which is nothing. And at that point, what was once seen to be nothing, will be seen to be something.