The absolute disconnect of asset prices from economic activity is and will continue to be unlike anything we have seen. This is no more of a "free market" than shooting a cow in a pasture is "hunting". "Invest" accordingly, but know full well the ill gotten gains will one-day, someday, sooner than later, be entirely gone and we'll all know what it felt like to be Bernie Madoff clients.
"The opinions of experts concerning the future are accorded great weight . . . but they’re still just opinions. While I take a dim view of forecasts, and especially of opinions presented as facts, I do believe there are such things as facts. Unfortunately, however, the concept of 'facts' is among the casualties of the increasingly partisan environment. Recently we have seen both the elevation in status of 'non-facts', as well as the tearing down of 'real facts'."
The “bond shock” story bubbles away in the background. And with the next 50-75bps rise in yields (due to perhaps expectations of trade wars or Chinese repatriation, or even further gains in inflation), the risk of a financial “event” is likely to jump. 2016 started with pessimism and ended with optimism; 2017 starts with optimism…
"The media and politicians had spent so much time with each other that they lost touch with regular people, and Trump capitalized on that... He made the media villains, representative of this out of touch, ivory tower political culture... I think there's some fairness to it..."
"Stocks have surged by 6% since the election on the prospect of higher earnings under potential Trump policies, but consensus bottom-up 2017 EPS forecasts for S&P 500 have been unchanged" - Goldman Sachs
"Shorting has been hard this year ... So despite what I think, we are beginning to close parts of our short book. We have largely exited airline related shorts. We have also closed staple shorts, as they were largely there to protect against a fall in yields, which they did to a degree. We have also closed many developed financial shorts to make some space for Chinese financial shorts."
Russian foreign ministry spox Maria Zakharova slammed "Obama and his illiterate foreign policy team" saying they "have dealt a crushing blow to America's prestige and leadership" and described his administration as "a bunch of geopolitical losers, enraged and shortsighted." Zakharova added that "Obama's administration still has a few days left to destroy the world."
"The only question that really matters in this business is this: What’s the next big move? It’s probably a continuation of the Trump trade"... But "the thing is, consensus trades have a nasty habit of working, just not exactly when you want them to"
After the overnight report previewing Theresa May's Tuesday speech calling for a "clean and hard" Brexit, cable has plunged to under 1.20 in very early (and illiquid) AsiaPac trading, the lowest level for sterling relative to the dollar since the October flash-crash. And, as DB warns, a full Brexit would be "consistent with GBP/USD at 1.06 or EUR/GBP close to parity respectively."
Mission 'accomplished' fear-mongers!! The most worrying issue in the US is terrorism. Isn’t that a hoot? How many in the US have died from terrorism? How much terrorism has the US sponsored in other nations, including its own drone policy?
Outspoken Trump supporter and Silicon Valley billionaire Peter Thiel is reportedly considering a 2018 bid for California governor. While Politico reports close Thiel friends are skeptical, the deeply-private entrepreneur's rare interview with the New York Times’ Maureen Dowd raised eyebrows and Thiel has conspicuously yet to rule out a bid.
According to Tom Lee, 2016 was the year with the fewest number of days that saw the S&P drift more than 3% away from 52-week highs: "2016 (we do 2016 after 2/11/2016, since early part was a continuation of 2015 selling) saw only 7 days - that is the lowest ever."
According to the Sunday Times, on Tuesday U.K. Prime Minister Theresa May will call for a “clean and hard Brexit’’ saying she’s willing to quit the European Union’s single market to regain control of Britain’s borders and laws. The prime minister’s staff have warned that her words would likely cause a “market correction” that could lead to a fresh fall in the pound.