Morning Note

US equities are trading nicely in green this morning, boosted in the pre-market by a surprise pop in oil prices (and, per the below, by some serious short covering). Asian equities, save for Japan, rose across the board last night. Europe’s trading solidly in the green. Bonds are selling off (yields higher) a bit (2-yr+ maturities). The dollar’s down in Asia, but mostly up in Europe. Commodities (ex-ag), save for palladium, are trading higher.

The pre-market jump in oil corresponded precisely with this tweet:



This tweet yesterday morning, however, didn’t provoke the hoped-for market response (at least not yesterday). Although, combined with the pop in oil, I suspect it isn’t hurting at all this morning.





In terms of the fundamentals, nothing’s changed. I.e.,  conditions remain ugly with no letup in trend at this point.

The above comments no doubt largely explain this morning’s move in equities, exacerbated markedly I strongly suspect by some serious short-covering: Futures traders came into this week with the highest net short exposure on SPX in years, while SPY short interest was hugely elevated as well.

SHORT-COVERING = buying borrowed shares
SPX = S&P 500 Index
SPY = ETF that tracks the S&P 500 Index