Yes, customer service? I'd like to report an outage in the magic money machine.
Whatever went “wrong” on Tuesday went “right” on Wednesday as stocks surged and the Dow broke above 26,000 again.
Apparently, someone called customer support yesterday when the rally faded.
Semis surged:
Fund managers are OW to the tune of 1.1 standard deviations above the long-term average:
Goldman fell after Q4 results showed a 50% decline in FICC revenue which, while not surprising, wasn't exactly comforting either. As expected, Chavez flagged commodities as the biggest driver of underperformance last year (recall the news on that from Tuesday).
Mercifully for the dollar, Treasurys sold off into the close which helped the greenback recover a bit after it (again) gave up early gains – or maybe the dollar recovered and that pushed yields higher. Chicken-egg. Whatever.
The BoC hiked rates and although it was generally seen as dovish (basically this is just improving econ versus NAFTA uncertainty), the dollar's knee-jerk gains against the loonie faded.
Here's Goldman's take for whatever that's worth:
The BoC hiked rates by 25bp at today's monetary policy meeting, its first hike since September of last year, and maintained its cautious policy stance. Governor Poloz said in his press conference today that “we say we are—and we are—data dependent, and there's no question that the data on balance since October have been stronger than our base case.” With that in mind, the Bank emphasized the significant uncertainties facing the economy—particularly with regards to NAFTA—but felt that a rate hike was warranted. The outcome of the meeting was broadly in line with our expectations, and we maintain our forecast for three additional rate increases this year, as well as our 12m target for USDCAD of 1.20. However, in light the still-cautious tone from the Bank, we do not see particularly attractive risk/reward in the Loonie from current levels.
