The just concluded 13-F bonanza shows that "some of the world’s top hedge fund managers scaled back their U.S. stock investments last quarter as markets tumbled." Below, courtesy of Bloomberg, is the full summary of what the most prominent hedge fund names did in Q3...
There is a very clear distinction in which cities US consumers are doing well, versus cities in which they have been tapped out. For those wondering where the US consumer is all spent out, look no further than the cities at the bottom of this chart.
Behold! More shark jumping as BofA, Citi blame warm weather for weak October retail sales: "We believe abnormal weather patterns may have biased retail ex-auto sales lower in October."
The latest BAC credit and debit card spending data is out and it is not pretty, and not just for the mid-level consumer who, as documented previously, has been tapping out ever since April as the following Gallup consumer spending chart shows but also for the high-end.
Of all sectors the one which may pose the biggest surprise to investors is financials: it is here that Q3 (and Q4) earnings estimates have hardly budged, and as of September 30 are expected to rise by 10% compared to Q3 2014. This may prove to be a stretch according to Morgan Stanley whose Huw van Steenis is seeing nothing short of a bloodbath in banking revenues, with the traditionally strongest performer, Fixed Income, Currency and Commodity set for a tumble as much as 25%, to wit: "we think FICC may be down 10- 25% YoY (FX up, Rates sluggish, Credit soft), Equities marginally up but IBD also down 10-20%."
The National Highway Traffic Safety Administration (NHTSA) and the Alliance of Automobile Manufacturers is currently working on a plan to put alcohol detection systems in every vehicle. The plan, called Driver Alcohol Detection System for Safety (DADSS), is still in its early stages, and while they are calling this technology “non-invasive” but it tests the content of your blood every time you get into your vehicle, which by its very nature is extremely invasive.
"The weakness in the August BAC data suggests a high risk for softness in the Census Bureau advance retail sales report given that the two measures trend closely. While we know that the retail sales figures are volatile and subject to revisions, it is hard to ignore a weak report." Why is all of the above particularly important? Because with the August Retail Spending report due on September 15, it will be the last report on the economy the Fed will read ahead of its "most important if not ever then surely in the past decade" FOMC meeting starting on September 16, and concluding with the 2pm announcement on September 17.
Following May's bounce in retail sales (thanks to a rise in gas prices), June's headline data printed a 0.3% plunge - the most since Feb 2015 - against expectations of a 0.3% rise. Retail Sales ex-Autos also fell MoM (down 0.1% against expectations of a 0.5% rise). This is exactly in line with our warnings last week that spending was likely to drop following a slide in credit and debit card spending as retail sales declined in autos; furniture; building materials; clothing; general merchandise; restaurants; online and miscellaneous. The control grouop data showed a mere 2.1% rise YoY - confirming recessionary signals from wholesale sales data.
After staging another dramatic slump early in the year, which was once again blamed on snow to offset what was supposed to have been an "unambiguously good" for US spending gas price slump, retail sales finally picked up in May, laying out hope that the June print and onward, would be "good enough" to suggest that the US economy is recovering, some 6 years after the "recession ended" mind you, and is on track for a Fed rate hike.
"We are left puzzled by the weak April consumer spending data - we expected the consumer to be a tailwind for growth in this year, offsetting the drag from weaker investment and manufacturing... If consumer spending does not accelerate, we will have to question our forecast for GDP growth to accelerate back above 3.0% in the second half of the year."
This is the email Bank of America's economist Hans "Great Rotation" Mikkelsen blasted out moments ago, without shame and without the embarassment that thousands of people would read this and burst out laughing.
- Clinton Charity Tapped Foreign Friends (WSJ)
- Dollar Set for Worst Week Since ’13; S&P Futures Rise (BBG)
- Shale Producers Have Found Another Lifeline: Shareholders (BBG)
- BOJ Kuroda says no sign of 'currency war' brewing in world (Reuters)
- Fed Is Pushing and Pulling on Rates Riddle (WSJ
- Brent oil falls towards $54 on OPEC output, Iran (Reuters)
- Iran Talks Stall Over Ending of Sanctions (WSJ)
- As reported here first: The U.S. Has Too Much Oil and Nowhere to Put It (BBG)
- Dollar Drops From 12-Year High as S&P Futures, Bonds Gain (BBG); Dollar Bulls Retreat From 12-Year High to Euro With Fed in View (BBG)
- Clinton Private Email Plan Drew Concerns Early On (WSJ)
- ECB Bond Buying Not Needed With Economy Improving, Weidmann Says (BBG)
- China Feb new yuan loans well above forecast (Reuters)
- U.S. probing report Secret Service agents drove car into White House barrier (Reuters)
- Kerry tells Republicans: you cannot modify Iran-U.S. nuclear deal (Reuters)
- PBOC Pledges to Press on With Rate Liberalization Amid Slowdown (BBG)
- China Prepares Mergers for Big State-Owned Enterprises (WSJ)
FX Volatility Spikes As More Countries Enter Currency Wars; Euro Surges On Furious Squeeze After Touching 1.04Submitted by Tyler Durden on 03/12/2015 05:57 -0500
The global currency wars are getting ever more violent, following yesterday's unexpected entry of Thailand and South Korea, whose central banks were #23 and #24 to ease monetary conditions in 2015, confirming the threat of a global USD margin call is clear and present (see "The Global Dollar Funding Shortage Is Back With A Vengeance And "This Time It's Different"). But the one currency everyone continues to watch is the Euro, which the closer it gets to parity with the USD, the more volatile it becomes, and moments after touching a 1.04-handle coupled with the DXY rising above 100 for the first time in 12 years, the EURUSD saw a huge short squeeze which sent it nearly 150 pips higher to 1.0643, before the selling resumed.
Stick a fork in the now proven wrong theory that plunging gas prices would boost consumer spending. Why? Because 4 months after the full impact of tumbling gas price was said to become apparent, consumer spending is not only not picking up, it is in fact slowing down more, especially in those places where there was snow in the winter, and gasp, where oil price actually fell the most!