Where Is Today's "Rack" Trade?

Ever have a pairs (spread) trade where both sides were moving against you?  Ouch!  Been there, don’t want to do that. Well, this is what we call the rack trade...

BofA Institutional Clients Sell Tech Stocks For 3rd Straight Week

Last week, during which the S&P 500 climbed 0.2%, BofAML clients were net sellers of single stocks for the third consecutive week, although the number was almost offset by net buying of ETFs. Institutional clients were the biggest sellers and have now sold stocks the last two weeks,

Trump "Increasingly Frustrated With China" Over North Korea, Trade: Reuters

Two weeks after Trump's ominous "China "tried and failed" to contain North Korea tweet, the US president appears to be getting closer to that default condition in US-China relations which many had anticipated from day one: a not particularly cooperative one, and as a result Reuters reports that Trump is "increasingly frustrated" with China over both North Korea and trade differences.

Hong Kong Small Caps Crash Amid Marketwide Margin Call: "It's A Domino Effect"

"We’re seeing a domino effect; all the companies in the same network got cut.  These shares are owned by the same group of people so they must be experiencing a liquidity crunch and they don’t have the money to support the share prices. Obviously there’s been some margin calls and forced liquidation of shares among these companies." 

IMF Slashes US GDP Forecast, Says Trump's Growth Target Is "Unrealistic"

The IMF has cut its US GDP forecast to 2.1% in 2017 from 2.3% projected in April and to 2.1% for 2018 from 2.5% previously, it said in a statement following its U.S. Article IV Consultation, and warned that the U.S. is unlikely to meet Trump’s target of 3% annual growth.

Case-Shiller Home Price Growth Slows As San Francisco Bubble Continues To Deflate

Amid a slew of mixed housing data (weak starts, permits; rebound in existing sales at record median prices), S&P CoreLogic Case-Shiller reports that home price growth slowed to just 0.28% MoM (the weakest since Aug 2016), considerably worse than the average seasonal slowdown. Home prices fell from the prior month in Cleveland, Boston, San Francisco, Washington, and Tampa, Florida. Year-over-year gains also slowed to just 5.67%, missing expectations. 

Frontrunning: June 27

  • Stocks, dollar ease as central bank officials take center stage (Reuters)
  • Euro surges on Draghi comments, dollar slips (Reuters)
  • Yuan Surges in Afternoon Trade Amid Talk PBOC Supported Currency (BBG)
  • U.S. threatens Syria, says Assad is planning chemical weapons attack (Reuters)
  • Google Gets Record $2.7 Billion EU Fine for Skewing Searches (BBG)

Euro Surges, Bunds Tumble On Unexpectedly Hawkish Draghi Comments

The euro surged to its highest in two weeks after Mario Draghi, speaking at the ECB forum in Sintra, Portugal, surprised markets who expected yet another dovish speech from the central banker, who instead signaled that stimulus tapering may be closer than the market anticipated and said factors weighing on inflation in the euro zone were "mainly temporary" and the central bank could look through them.