Terrible, horrendous headlines

The market opened feeling weaker with corporate bond spreads wider.
By the afternoon, the market shrugged off all worries with stocks rallying and spreads for financial and corporate bonds closing tighter.
Eurozone confidence indicators were bad and there was a larger than expected drop in Deutsche Bank's 1st quarter profits with its investment bank underperforming peers and weakness in its asset management business.
Initial jobless claims numbers also came out higher than expected.
Yet the stock market chose to ignore all negative indicators (but interestingly there was a stealth bid for U.S. Treasury bonds).
It is clear that the stock market momentum is in favor of rallying.
The underlying reason is that there is a significant short base in the markets already and so investors require more than just "bad" headlines to short the market.
It seems like only terrible, horrendous (as opposed to just "bad") headlines will cause the market to sell off.
Earnings for Barclays beat expectations on strong capital market results.
Given the leeway for earnings management in the financial industry using accounting metrics, traders tend to be a little wary.
Whether or not a bank reports a profit or a loss is determined as much by the underlying political environment and / or the need to defend pay practices for senior executives as it is by the actual fundamental performance of the business.
With overall secondary trading volumes relatively light in the bond markets, idiosyncratic company-specific risk made a comeback.
Investors focused on Vivendi after rumors of a potential break-up of the company initially sent credit spreads much wider, only to tighten back in off of the wide prints.
Investors also focused on H&R Block; credit spreads widened out more than 100 basis points after the company reported earnings.
In the primary bond pipeline, emerging market issuers continue to be active.
Indonesian oil major Pertamina issued USD-denominated bonds right on the heels of yesterday's CNOOC (China National Offshore Oil Corporation) Yankee (foreign issuer issuing in USD) bond deal.
Brazilian bank Banco do Nordeste and Brazilian petrochemical giant Braskem also issued Yankee bonds.
In technology, Amazon earnings came out better than expected.
GDP and University of Michigan Consumer Confidence numbers are out on Friday.