With the Services economy now catching down to Manufacturing's demise (in its lagged - not decoupled - manner), this morning's news that US Factory Orders tumbled 2.9% in December (worse than expected and the biggest MoM drop since Dec 2014) offers little hope for any bounce anytime soon. This is the 14th monthly drop in YoY factory orders - something has not happened outside of a broad US economic recession. Even more concerning is the surge in inventories-to-shipments to cycle highs seen in 2000 and 2008.
As you might have noticed, the “recovery” story is starting to fall apart...
We are going to need more "whatever it takes." And with Draghi's efforts to shove sovereign bonds down the throat of Europe's banks, the sovereign-to-financial linkage is now systemically as worrisome as it has ever been...
Martin Shkreli Pleads The Fifth During Congressional Hearing On "Skyrocketing" Drug Prices - Live FeedSubmitted by Tyler Durden on 02/04/2016 - 09:42
Martin Shkreli has pleaded the Fifth amendment right against self-incrimination during the hearing.
The head of one of the biggest high-frequency trading companies has warned that there are several faultlines in the structure of increasingly electronic, automated financial markets that could lead to a “catastrophe” in the long run. "We’re creeping in the right direction, but unless we proactively address these issues, sometime in the next several decades we are going to experience a catastrophe due to runaway computerised trading,” Tower Research's Mark Gorton said.
Yesterday it was chatter of 6 (non-Saudi) OPEC members agreeing to an emergency meeting (to do what exactly?) that ramped crude (despite dismal production, inventories, and demand data). Today it is talk of Turkey potentially invading Syria from the Russian defense minister...
Its deja vu all over again in the land of speculative Yuan shorts today. With Golden Week looming, it appears PBOC is stomping on the throat of speculative shorts in the offshore Yuan with another gross intervention. The last 2 days have seen "someone" panic-buying Yuan higher by a stunning 800 pips, smashing CNH back to 3-week highs when then PBOC last intervened in size...
Nonfarm Productivity collapsed by 3% QoQ, notably worse than expected as labor costs jump. Economists are gnashing their teeth to explain this "plunging productivity paradox" - we think it is rather simple...
Since the beginning of 2014, Initial jobless claims and Challenger Job Cuts have decoupled as the former "trended" in its seasonally adjusted manner while the latter appeared to reflect a different reality. That all changed in October last year as the trend in claims began to turn. Last week's jump to 285k dragged the less noisy 4-week average to 285k - the highest since March 2015 as initial claims begin to catch up to Challenger Job Cuts...
ConocoPhillips Slashes Dividend, Warns Of "Lower Prices For Longer"; Weatherford Fires 15% Of All WorkersSubmitted by Tyler Durden on 02/04/2016 - 08:30
Another day, and another round of increasingly uglier news from the global energy sector.
While we await the heavily massaged Initial Claims report from the DOL, moments ago we got the report of actual job layoff announcements tracked by Challenger Gray, and it was quite grim: in the first month of 2016, US-based employers reported 75,114 planned job cuts. January represents the highest monthly tally since July 2015, when cuts reached 105,696. Most troubling, it was the largest January total since 241,749 job cuts were announced during the first month of 2009.
"The environment has deteriorated materially during the fourth quarter of 2015 and it is not clear when some of the current negative trends in financial markets and in the world economy may start to abate."
- EU Slashes 2016 Inflation Forecast to 0.5% as Growth Seen Slower (BBG)
- Bank of England cuts UK growth forecasts (FT)
- Investors Cast Wary Eye on Fed Rate Increases (WSJ)
- U.N. halts Syria talks as government closes in on Aleppo (Reuters)
- Credit Suisse Drops as Investment Bank Slump Deepens Losses (BBG)
- Six OPEC states ready for emergency meeting with non-OPEC members — Venezuela's minister (TASS)
After yesterday's torrid, chaotic moves in the market, where an initial drop in stocks was quickly pared and led to a surge into the close after a weaker dollar on the heels of even more disappointing US data and Bill Dudley's "serious consequences" speech sent oil soaring and put the "Fed Relent" scenario squarely back on the table, overnight we have seen more global equity strength on the back of a weaker dollar, even if said weakness hurt Kuroda's post-NIRP world and the Nikkei erased virtually all losses since last Friday's surprising negative rate announcement. Oil and metals also rose piggybacking on the continued dollar weakness as the word's most crowded trade was suddenly shaken out.