Money Laundering

Well, Tuesday is in the books and equities felt tentative, perhaps realizing that in just over two weeks, we’re going to be staring down another crisis in D.C.

That said, stocks were broadly higher (because stocks only go one direction and it isn’t down). The Nasdaq outperformed as Netflix surged.

 

It was a good day for Whirlpool, which today celebrated Trump’s decision to literally start a residential washing machine war with South Korea:

 

Just call it “money laundering” (get it?) which is convenient because that’s what the headlines are going to be when Trump and his mute son-in-law are finally indicted.

The dollar gyrated, but the default mood is “sell” because you know, Trump and D.C. gridlock. DXY is now sitting near its lowest levels since December 2014:

 

Tough day for Twitter and you should already know why. If not, see here.

 

In a testament to “what could possibly go wrong?”, high yield spreads are now sitting at their lowest since 2007:

 

High yield is, of course, getting a boost from voracious risk appetite and higher crude prices. Speaking of crude, oil rose to a fresh 3-year high on Tuesday helped along by an upbeat growth outlook from the IMF:

 

This:

Energy high-yield spreads have tightened by 80bps YTD, just 13 sessions into 2018. pic.twitter.com/igsAfmkXGt

— Luke Kawa (@LJKawa) January 22, 2018

The yen was in focus following the BoJ. We recapped the tweak to the inflation language first thing Tuesday morning and if you care at all about these things, you should check it out here, but this is the annotated chart:

 

Needless to say, that’s probably not what Kuroda had in mind when he set out to jawbone the yen weaker.

Japanese shares rallied sharply, undeterred by the change to the BoJ language. At the presser, Kuroda reiterated his commitment to the ETF buying program and said that as far as he can tell, there’s “no excessive bullish expectations in the stock market.” Write your own jokes.

The Nikkei and the Topix both rose more than 1% on Tuesday to new 26-year highs.

 

The H-share rally extended to a truly absurd 18 consecutive sessions on Tuesday. That’s a (new) record. The relative-strength index there rose to 89, which would suggest it’s the most overbought since 2006:

 

Just to underscore how well things are going in Hong Kong, have a look at the Hang Seng’s daily performance numbers in the bottom pane. It’s hard to find a down day:

 

You might recall that last week we asked if you were paying attention in a post called “Are You Paying Attention To Hong Kong, Because I’m Paying Attention To Hong Kong.” Well, at least the folks at Bloomberg are paying attention. Check out this piece for more.

Oh, and Bitcoin fell below $10,000 at one point on Tuesday morning. It’s been a tough stretch for finance bloggers trying to talk up their crypto holdings by exclaiming that there’s no new news and thus no reason why their make-believe space tokens aren’t rallying:

 

Finally, for your moment of zen, here’s poor Gary Cohn trying to explain what “America first” means…

Trump economic adviser Gary Cohn: "America first is not America alone...we're part of a world economy, and the president believes that." pic.twitter.com/vQd3WmGXkC

— ABC News (@ABC) January 23, 2018