AM Notes: Turnaround Tuesday?

Risk is looking a little healthier this morning, with all U.S. indices slightly higher...

In FX, Aussie yen is ignoring the Bitcoin correlation, trading near last weeks highs, and the dollar is dumping...

EURUSD above 1.2050 and cable sits just below the 1.40 handle...

Asian indices put in a mixed performance overnight:

News that Japan are (further) delaying approval of the AstraZeneca vaccine (whilst a third state of emergency looks imminent) is being blamed for sending Japanese indices lower...

Japan needs to consider scrapping the Tokyo Olympics and speeding up its vaccine rollout amid growing virus infections, according to former Finance Minister Jun Azumi

The ASX lost some ground with no obvious driver...

RBA minutes were released: wages and inflation are still too low and the unemployment rate remains too high, so far too soon to withdraw policy support...

Although it looks like the TFF will not be renewed in June:

Consumer sentiment is still strong:

And recruitment shows no signs of slowing...

China kept their policy rate unchanged as expected, and Big Jinny Xi was speaking at the Boao forum earlier too

“International affairs should be conducted by way of negotiations and discussions, and the future destiny of the world should be decided by all countries,”  

(MENTIONING NO NAMES, I DIDN'T SAY AMERICA, BUT YOU ALL KNOW I MEAN AMERICA RIGHT?)

Nothing particularly new in his speech...

So, is today a Turnaround Tuesday™ for U.S. equities?

Probably... why wouldn't it be?

This list from BofA suggests that practically everything is pointing bullish...

and this headline via Bloomberg yesterday

At the same time, hedge-fund longs are around the highest relative levels in years at JPMorgan Chase & Co.’s prime brokerage.

They’re all signs of the bullish mania propelling global equities to fresh records this month, thanks to the economic re-opening and big policy stimulus. The smart money has little appetite to wager against either expensive or deadbeat companies -- especially after being lashed by the day-trader army earlier this year.

“There’s just mass euphoria,” said Benn Dunn, president of Alpha Theory Advisors. “No one wants to get their head ripped off by a short anymore.”

“This is a long-only type market based on the overwhelming fundamental story,” said Phil Camporeale, portfolio manager in multi-asset solutions for JPMorgan Asset Management.

That’s not to say investors aren’t adding downside protection, they’re just choosing to do it in the options market.

Bearish contracts on the S&P 500 and its biggest exchange-traded tracker have increased relative to bullish ones in the past month.

The S&P's bullish trend is very much intact: 4140 support area found bids, exactly as you would expect in a strong market.

There is definitely reason to be wary, Danske noted that defensive stocks have outperformed cyclicals in four consecutive sessions now...

It takes a braver man than me to short the S&P in the absence of an obvious catalyst...

The trend is your friend until it ends...

Another quiet day on the calendar awaits

UK employment data for March (just out) is heading in the right direction, and Economists say unofficial data confirm forecasts of a strong rebound in second quarter