Ahead of today’s open S&P futures were trading around unchanged. That was before Treasury Secretary Bessent once again donned his alchemist robes. The Treasury announced that it would double the size of its liquidity support buyback operations for longer-dated Treasuries (10-30yrs) to $4B. It was another well-timed headline by the Warlock, following recent conjuring in the FX market.

10y/30y fell 8/10bp and the curve flattened as the 2yr backed up a couple of basis points. The USD weakened and futures ramped into the open. The S&P was up 0.3% at the start of trading and reached a high of 0.7% looking to fill yesterday's gap down, but has pulled back toward opening levels. The equal-weight is easily outperforming as mega and large cap growth lags. Small caps also are outperforming.

The big corporate news came not from earnings but the clinic, as Moderna and Merck announced positive topline results from a Phase III cancer trial. The news has triggered a broad rally in Healthcare, placing it at the top of the sector performance list today, and biotech in particular. Behind Healthcare is Materials (miners stronger but steel weaker) and Consumer Discretionary. Tech is lagging and mixed. The semis/memory weakness yesterday has continued (though more modestly).

The 2yr is up 2bp while the 10/30y are down 5-8bp. Today's 20yr auction tailed by 0.5bp this afternoon but wasn’t enough to dent the long-end rally. It’s also the odd-duck of the bond market versus the 10-and 30-years. The FOMC minutes look to be skewed less hawkish than expected, however, with "most participants anticipating that inflation would step down", despite the three dissenters that wanted to hike. Yields pulled back a little on the release. The Treasury news has weakened the dollar on the major crosses. The yen is up a little under 1% against the greenback, providing a shadow intervention. The crypto complex is seeing sharp gains with Bitcoin and ETH up 6-9%. Just in time for today’s White House meeting with crypto and prediction market executives. Ag also joined the commodities rally with wheat, corn and soy up ~2%.