Archive - Dec 31, 2014 - Story

With GREXIT once again knocking on the Euro's door, Mario Draghi has come out swinging (or jawboning). As Reuters reports, the non-political, non-meddling, completely independent central bank chief explains, structural reforms were needed to "ensure that each country is better off permanently belonging to the euro area," adding that Euro zone countries must "complete" their monetary union by integrating economic policies further and working towards a capital markets union. Brussels Uber Alles... (or else "the threat of an exit (from the euro) whose consequences would ultimately hit all members").

Hot on the heels of his Xmas Poem, 50-year NYSE veteran Art Cashin, UBS Director of Floor Operations, has unveiled his New Year's Poem summarizing the year behind and looking at the year ahead. From ISIS to The Ice Bucket Challenge and from Joan Rivers' death to Kim Jung Un's life, Cashin covers it all...

Just 3 short days ago, energy stocks were surging and oil was - according to the mainstream media - "stabilizing." Today, we plumb new cycle lows, with WTI back below $53 as every rally is to be sold for now... While no one can resist the temptation to call the bottom in oil, the recoupling of oil-dependent energy stocks from oil appears to the no-brainer trade of January... Here are 3 potential reasons for today's drop.

It appears the glorious trend of decling initial jobless claims has run its course. For the last 5 months, initial claims have oscillated around the crucial-to-the-narrative 300k level - breaking the constant downtrend of the last 4-5 years. Today's 298k print, up 17k from last week, is the same level seen in the 3rd week of July. This is the highest 6mo. rise in initial claims since the middle of the Polar Vortex.

To all those wondering if everything is rigged, we have a very simple answer: Yes.

• Behind the Scenes at Sony as Hacking Crisis Unfolded (WSJ)
• Oil Set for Biggest Slump Since 2008 as OPEC Battles U.S. Shale (BBG)
• Praet Warning of Oil Effects Signals Higher Chance of ECB QE (BBG)
• U.S. Opening Door to More Oil Exports Seen Foiling OPEC Strategy (BBG)
• Venezuela confirms recession, inflation hits 63.6 percent in Nov (Reuters)
• U.S. to station 150 armored vehicles in Europe (Reuters)
• China Stocks Rise to Finish Off Big Year (WSJ)
• RBS Suspends Bonuses of 18 Traders Amid FX Rigging Fine (BBG)

While the last trading day of 2014 will be important if only to see if Dow 18,000 can be recaptured on what is sure to be the lowest volume in years, don't expect much help from Brent which continues to slide and was down nearly 3% at $56.20 or WTI which is also flirting with the $53 level, down almost 2% overnight both set to cap the worst year for the commodity since 2008. Not much should be expected from Treasuries either, set to return over 6% in 2014 - the best performance since 2011 - crushing the latest hoard of bond shorts all of which got the Treasury move in 2014 epically wrong, which will close early at 2 pm. Which means that the HFT algos will once again be driven off the illiquid USDJPY correlation, where low volume will mean 5-10 pip moves today should be the norm, as well as European stocks, whose Stoxx Europe 600 Index rose 0.3% earlier on the latest round of jawboning by an ECB member, this time Dutchman Peter Praet, who said in an interview with German newspaper Boersen-Zeitung that lower oil prices increasingly risk de-anchoring inflation expectations, indicating that quantitative easing is becoming more likely.