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Morning Update


Consumer confidence in the Euro area plunged 3.1 to -24.6, the steepest decline in three years. Consumer confidence has only been lower than current levels three times in the past 30 years. Germans were the most confident (or rather least unconfident), while Greeks “are urgently trying to find new reasons to keep pushing the rock uphill day after day” (ZeroHedge).


US jobless claims were up to 374K versus 372 prior and 370K expected. Yesterday’s Beige book showed most districts “growing gradually”, retail sales increasing, and stable prices for finished goods. This is all good news, except for traders betting on the Fed announcing a new round of easing. The market was little changed by the news as it looks to Bernanke’s speech tomorrow.

The S&P 500 has only changed more than 0.25% 4 of the last 16 days, while during the same period the VIX has inched up from a low of 13.28 to 17.06. Implied volatilities premium to realized volatility continues to grow and is exceptionally high by historical standards.

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Morning Update

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