Bank of America

Gundlach Feels Like We Are Back In December, Says "Stocks Are Dead Money" After A Short Squeeze

Jeffrey Gundlach, the chief executive officer of DoubleLine Capital, said on Tuesday that the rally in U.S. stocks, which began on Monday, feels like a short squeeze and characterized U.S. stocks as "dead money." He added that  "all that matters is Yellen. She is still there. I feel like we are back in December again, where everyone thinks that there is a super secret that some Fed officials have this knowledge that the economy is really good."

Despite Rising Market, "Smart Money" Sells For Record 17th Consecutive Week

Another week, and another quiet exodus by the "smart money" clients of Bank of America (hedge funds, institutionals and private money), who collective sold $218 million in stocks, the 17th consecutive week of selling completely oblivious of a market that "wants to go higher" according to Bob Pisani, and as BofA notes, "continuing the longest uninterrupted selling streak in our data history (since '08)."

Frontrunning: May 24

  • Asian stocks near 11-week lows, dollar bounces on Fed rate view (Reuters)
  • Poll Finds Lack of Enthusiasm for Clinton and Trump (WSJ)
  • Oil falls for fifth day as focus returns to growing exports (Reuters)
  • The Hedge Fund That Couldn't Stay Open Long Enough for a Big Payday (BBG)
  • French police break up refinery blockade in anti-reform showdown (Reuters)

The "Doom Loop Is Coming Back" - Deutsche Bank Sees "No Further Upside For European Stocks"

"In January, we projected that the Fed rate hike would lead to increased financial stress and falling equity markets; this, we argued, would lead the Fed to turn more dovish, which – in turn – would allow equities to rebound. This has played out. Yet, the Fed relent has been partial – and the latest FOMC minutes point to increasing risks that we will re-enter the “doom loop” from a more hawkish Fed to a stronger dollar, lower oil prices, higher HY credit spreads and lower equity markets."

The BDC Consolidation Begins: Ares Buys American Capital For $3.4 Billion

Back during the last bubble, Business Development Corporation (BDC) pioneer American Capital was one of the hottest business models (and most desired companies to work for). However, when the bubble burst, so did the company's stock price, as well as its reputation, and in the past 9 years the company failed to see its stock price recover anywhere near the levels seen during the last bubble. Which is perhaps why moments ago in a dramatic move shaking up the BDC space, ACAS announced it would sell itself to another BDC titan, Ares Capital in a deal worth $3.4 billion.

Frontrunning: May 18

  • Stocks sag as U.S. rate rise expectations revive (Reuters)
  • Clinton, Sanders hit final stretch of nominating contest (Reuters)
  • Bernie Sanders Wins in Oregon, But He Needed Kentucky, Too (NBC)
  • Clinton less than 100 delegates from nomination (The Hill)
  • Trump needs 66 delegates to officially clinch nomination (The Hill)
  • Japan GDP Rebound Not Enough to Stave Off Stimulus (WSJ)

"The Nightmarish Merry-Go-Round" - The Only Chart You Need To Trade This Market

"By some accounts the Fed is stuck in an adverse feedback loop. They want to raise interest rates so they can "reload" their policy ammunition, but the markets won't let them. The chart of the day illustrates this nightmarish merry-go-round: the Fed threatens to hike, markets tank, the Fed delays the hike, the market recovers and the cycle repeats."

"We Should Be Concerned" - Stock Buybacks Plunge Most Since 2009

After snapping up trillions of dollars of their own stock in a five-year shopping binge that dwarfed every other buyer, U.S. companies from Apple Inc. to IBM Corp. just put on the brakes. Announced repurchases dropped 38 percent to $244 billion in the last four months, the biggest decline since 2009, data compiled by Birinyi Associates and Bloomberg show. “If the only meaningful source of demand in the market is companies buying their own shares back, then what happens if that goes away?” asked Brad McMillan, CIO of Commonwealth “We should be concerned.”

What DOJ Probe: Citadel Acquires Electronic Trading Pioneer ATD To Cement HFT Dominance

Less than a week after Reuters broke the story that the Department of Justice is probing HFT powerhouse Citadel, which admits it executes 35% of all trades by retail investors in U.S.-listed stocks, whether it is also frontrunning those orders (an allegation that many are convinced is a rock-solid fact) we find that billionaire Ken Griffin is not at all concerned about the outcome of the investigation on his core business model and is instead expanding. Citadel is acquiring the equity-trading operations of Citigroup’s Automated Trading Desk division, one of the pioneers of high-frequency trading.

How Hedge Funds Invest Heavily In Washington D.C.'s Culture Of Corruption

If you want to get a sense of what’s motivating Donald Trump and Bernie Sanders voters, it’s a desire to take people like Robert Shapiro, remove them from the halls of power, and toss them into a cardboard box on the street. Of course, that won’t be happening any time soon, but that’s what a lot of people want. As we detail below, confirmed recently by Congressman X, Washington is infested by the secretive world of the dark money groups representing mercenary hedge funds in their insatiable quest for more and more money. In many ways, it’s merely a microcosm of America in 2016. A culture in which ethics has become so irrelevant, it isn’t even a nuisance; it simply never factors into the equation.