BAC

April Retail Sales Plunge Most Since 2005

Something ugly this way comes. As we noted last week, despite proclamations that any weakness in US spending or economic data is merely seasonal or transitory, BofA's credit and debit card spending data revealed that sales were notably weak. Today we get further confirmation of what Retail ETF investors have been seeing for a while as Johnson-Redbook reported a 2.8% plunge in Same-Store-Sales - the worst start to an April since 2005.

Earnings Implosion Looms Amid The Illusion Of "Permanent Liquidity"

The problem with forward earnings estimates is that they consistently overestimate reality by roughly 33% historically. The illusion of“permanent liquidity,” and the belief of sustained economic growth, despite slowing in China, Japan, and the Eurozone, has emboldened analysts to continue push estimates of corporate profit growth higher. Even now, as the earnings recession deepens, hopes of a sharp rebound in profitability remains ebullient despite the lack of any signs of economic re-acceleration.

Consumer Spending Falls Again In March According To Latest Credit Card Data

While big banks blame the collapse in Q1 GDP on "residual seasonality" (more on that later), with BofA recently slashing its Q1 estimate from as much as 2.7% to just 0.2%, the reality is that something is not well with the US consumer. The latest proof of this comes from the most recent Bank of America credit and debt card spending data, which reveals that sales were once again down 0.1% yoy.

What Hedge Funds Bought And Sold In Q4: The Full 13-F Summary

Yesterday was the last day for hedge funds to submit their Q4 13-F filings, and the biggest reactions this morning can be found in the stock of Kinder Morgan which rises 9% pre-mkt after Berkshire reported a new stake. Autodesk also gained 2% post-mkt yday after Lone Pine took a new position. Several funds boosted or reported new stakes in JD.com while Jana Partners reported a new stake in Valeant. Both Icahn and Einhorn trimmed their AAPL holdings.

The Return Of Crisis

Let me be blunt: this next crash will be far worse and more dramatic than any that has come before. Literally, the world has never seen anything like the situation we collectively find ourselves in today. The so-called Great Depression happened for purely monetary reasons. Before, during and after the Great Depression, abundant resources, spare capacity and willing workers existed in sufficient quantities to get things moving along smartly again once the financial system had been reset. This time there’s something different in the story line...

"2016 Will Be No Fun" - Doug Kass Unveils 15 Surprises For The Year Ahead

My overriding theme and the central drama for the coming year is that unexpected events can take on greater importance as the Federal Reserve ends its near-decade-long Zero Interest Rate Policy. Consensus premises and forecasts will likely fall flat, in a rather spectacular manner. The low-conviction and directionless market that we saw in 2015 could become a no-conviction and very-much-directed market (i.e. one that's directed lower) in 2016. There will be no peace on earth in 2016, and our markets could lose a cushion of protection as valuations contract. (Just as "malinvestment" represented a key theme this year, we expect a compression of price-to-earnings ratios to serve as a big market driver in 2016.) In other words, we don't think 2016 will be fun.

Unintended Consequences

Actions – including the state’s best-intentioned ones (giving them the benefit of the doubt) - have consequences, not all of them foreseen and some of them contrary to what was (we assume) intended.

Top Hedge Funds Dump Stocks In Q3: Complete 13-F Summary

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...

The Legendary U.S. Consumer Is Out Of Cash In These Cities

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.

Morgan Stanley Predicts Up To A 25% Collapse in Q3 FICC Revenue

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%."