Archive - Dec 2015

From Ecoli to Norovirus and from average-joes to college athletes, the success of CMG has become its down fall as something ugly is growing in the healthy fast food restaurant. The latest headline is a little intriguing, as amid all the carnage, Chitptle says it will have to raise prices... as new supplier standards will hurt margins, and require "significant cost" adjustment, according to CFO Jack Hartung. We will see if poeple wil pay more not to get siuck and lose 15lbs (or prefer to pay less).

"Training at this camp began with the knowledge of the Iraqi Defence Ministry and police. Those who make different interpretations of the Turkish military presence in Mosul are involved in deliberate provocation."

"ISIS is an enemy of my country. ISIS is a disgrace. It puts my religion in a bad light. They don't represent Islam and I do not consider them to be Muslims.”

Canadian stocks are down 15% from their highs in 2008 (and down 18% from the 2014 highs) as the blowback from a collapsing energy market ripples across the entire "not unequivocally good" economy. However, perhaps more worrying is the 2008-esque dynamic playing out almost perfectly for America's northern neighbor...

Gold sentiment may finally be getting bearish enough to support a durable bottom.

Who could have seen that coming?

Sales of American Eagle gold coins at the U.S. Mint surged in November, with gold demand nearly tripling month-over-month. China's gold reserves rose by another 21 tonnes in November, the biggest bout of gold buying since China began disclosing monthly data on it's gold reserves in June

Despite these very high levels of demand, gold prices fell sharply in November - from $1,141/oz to $1,070/oz or 6.6%.

Last week we asked (rhetorically) if "something just blew up in junk?" We have the answer today, as triple-hooks (CCC-rated debt) in the junk bond market have crashed through the worst levels of 2011 and are now at the highest yields since July 2009. Amid this complacency still reigns in the equity market (just as it did when the last credit cycle turned).

“A U.S. military official, speaking on condition of anonymity, said the United States is certain that Russia was responsible for the deadly strike on the Syrian army camp,” Reuters reports, adding that “the official flatly dismissed claims that U.S.-led coalition jets were responsible.”

We're gonna need more jawboning...

The day of reckoning has arrived for the oil price. After a year of "Oil Price Crash" in October the world managed record production of 97.09 Mbpd. Production momentum built in the period of high price, 2007 to 2014, is proving very difficult to switch off. It must be switched off and it seems to me the most likely scenario is sharply lower oil price in the near term.

PREVIEW: BoE December Rate Decision & Minutes Release 1200GMT/0600CST

• All surveyed analysts expect the Bank of England to keep monetary policy unchanged, with the bank rate at 0.5% and the Asset Purchase Facility at GBP 375bln

• Headline UK CPI printed at -0.1% for October, still well below the BoE’s mandated 2% target

FANGs are tumbling, seeming to have 'peaked' as ISM Services tumbled last week. But before you rush to buy the dip on these "gems" we thought it would be helpful to review some basic fundamental data in order to clarify exactly what investors are assuming when they purchase these stocks.

The last week has seen Small Caps first drop into negative territory for the year (joining Dow Transports). Yesterday The Dow joined the un-party. And today, following growth concerns from China trade data, The S&P 500 has tumbled to open in the red for the year...

According to Bank of America last week, during which the S&P 500 was essentially flat, BofAML clients were net sellers of $1.3bn of US stocks, following two weeks of net buying. Net sales were led by institutional clients, who have sold US stocks for the last five consecutive weeks.