Archive - Aug 24, 2015

?? Intraday margin on futures has been disabled for the day at TD Ameritrade. ??

— Nicole Sherrod (@TDANSherrod) August 24, 2015

And News That Matters

"Gold and silver will be your only lifeboats as they are no one’s liability in a world where everything including the money in your pocket is someone else’s liability.”

Are there any conditions now that are actually better than those of 2008? Or are conditions now less resilient, more fragile and more dependent on unprecedented central bank interventions?

Dow futures are now well below the 16,000 level - down a stunning 2500 points from the May highs. The Dow has given up all its gain since December 2013...

Paging Carl Icahn... AAPL shares just broke below $100 in the pre-open, the lowest since late October.

"We should all be in “survival mode” today; there is no reason to take action of any sort other than to raise liquidity where  necessary in order to survive the present chaotic situation. Survival is all that matters. All else is secondary, even if that means surviving with far less liquidity than one had only mid-week last week. This is time for retaining what liquidity we can muster; this is not a time for courage. Get smaller; get liquid and get safe. This is getting ugly and we can only hope it does not get worse."

"Regional buyers need a lot of conviction to step in front of this speeding train [especially] in context of a rapidly changing economic environment."

S&P FUTURES AT DAY’S LOW, FALLING 61PTS OR 3.1%
NEW LOWS FOR NASDAQ FUTURES, DOWN 195PTS OR 4.6%
NEW LOWS FOR DOW FUTURES DOWN 533PTS OR 3.2%
EUROPE’S STOXX 600 FALLS 5.3%, WORST ONE-DAY DROP SINCE 2011

• Deutsche Bank Says Rout ‘Very Serious’ as Growth Outlook Dims (BBG)
• Great fall of China sinks world stocks, dollar tumbles (Reuters)
• Global Stocks Fall Sharply Amid Concerns About the Chinese Economy (WSJ)
• Stock Rout Spreads Through Europe After China Plunge (BBG)
• China stocks give up year's gains as 'national team' stays on bench (Reuters)
• The Fed Is Looking at a Very Different Dollar Than Wall Street (BBG)
• French train gunman 'dumbfounded' by terrorist tag (Reuters)

• Risk averse sentiment dominated the price action overnight, with Chinese equities (Shanghai Comp -8.5%) again under heavy selling pressure as market participants were left disappointed by the lack of action by the PBOC to ease monetary conditions further. 
• US data is set to remain in focus as participants continue to try to gauge the possibility of a September rate lift off after last week’s Fed’s minutes highlighted concerns over China
• This week sees the first preliminary August CPI readings in Europe from both Germany and Spain

We warned on Friday, after last week's China rout, that the market is getting ahead of itself with its expectation of a RRR-cut by China as large as 100 bps. "The risk is that there isn't one." We were spot on, because not only was there no RRR cut, but Chinese stocks plunged, with the composite tumbling as much a 9% at one point, the most since 1996 when it dropped 9.4% in a single session. The session, as profile overnight was brutal, with about 2000 stocks trading by the -10% limit down, and other markets not doing any better: CSI 300 -8.8%, ChiNext -8.1%, Shenzhen Composite -7.7%. This was the biggest Chinese rout since 2007.

The last three times inflation expectations tumbled this low, the Fed was about to launch QE1, QE2, Operation Twist and QE3.

Germany's DAX is now down 15% since the "China doesn't matter" devaluation began with most European borses down 3-5% from Friday's close as the day started off with a modest bounce only to test new lows. EURUSD is now up 500 pips in 4 days back to 7 month highs. European bond risk is surging with Portugal up 50bps since China's debacle began. And finally crude continues to get battered, now testing the $38 handle for the first time since Feb 09.