THURSDAY 4/17/14; MS; GS; OpEx; Last Day of Trading before Easter

Asia markets trade flat to slightly higher after the strong US rally. Australia is the big winner with SPASX200 up +0.6%. Japan Consumer Confidence is at the lowest since August 2011. NIKK is flat. SSEC -0.3%. China sells off despite the PBOC cutting the RRR’s for certain rural banks to help stimulate local economies. These rural banks do not have to maintain as much cash reserves so this allows the banks to lend out more money. China property stocks are weaker dampening any bank enthusiasm especially with fresh home price data coming tomorrow. European futures are called lower. S&P futures are -3.

The violence increases in East Ukraine with pro-Russian forces gaining a larger grip on the region. Ukraine military jets are in the air. Three pro-Russian militants are shot and killed as they attack a Ukraine base; over one dozen others are injured. The violence is quickly becoming a shooting war. Armored vehicles are spotted in East Ukraine flying Russian flags. President Obama says that Putin’s aggressive decisions are going to be bad for Russia in the long term. The US, EU, Russia and Ukraine meet for talks in Geneva.

[Text is Redacted: Purchase April 2014-04 to Read the Complete Chronology]

The 10-year yield jumps higher today to 2.73% and settles at 2.72% receiving an 8 basis point bounce during a risk-on environment where money ran out of notes and bonds (prices down yields up) and into stocks. Traders believe in the stock market rally and since the US and Europe avoid confrontation in Ukraine, the holiday wine glasses raise toasting the Fed for providing non-stop money to drive the stock market higher and make the rich richer.

Positive SNDK earnings create a recovery in semiconductors that fuel the stock market higher. Disappointing earnings from IBM and GOOG are ignored by traders. Television personality Jim Cramer suggests buying IBM since it will be far stronger moving into 2015 and he also encourages buying Google considering it as growth at a reasonable price expecting higher prices for GOOGL moving forward. Strong levels of bullishness remain in markets.