The Gilmo Report

May 10, 2020

May 9, 2020 5:49 pm ET

The markets made history again this week when the fed funds futures moved into negative interest rate territory on Thursday. The market looked to me like it was ready for at least a pullback after Wednesday based on various divergences and the late-day weakness we saw for the second day in a row.

But on Thursday all of this was overridden by what we might now consider QE to Infinity & Beyond as the prospect of negative interest rates sent the algos on a steady buying spree. That spree continued into Friday, despite a brutal jobs number that saw 20.5 million jobs disappear in April.

The NASDAQ Composite Index stumbled its way to higher highs this week, and, believe it or not, is now up for the year. How can this be, you ask? The answer is simple: QE to Infinity & Beyond. And so, the stampede into stocks is perhaps less about fundamental underpinnings and mostly about the extreme mass of liquidity out there looking for a home.


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