Bank of America

Hedge Funds No Longer Have Any Idea How To Trade This Market

While we sarcastically pointed out back in 2013 that with the Fed (and now every other central bank) as the market's Chief Risk Officer, there is no longer a need for anyone to do fundamental analysis, this has not only come true but the outcome is now is far worse. Because it confirms what we have said all along: not only is there no market left aside from what Central Banks decide will happen to "risk assets" on any given day, but the smart money- both hedge and mutual funds - have now completely lost the plot.

Day 3 Of Global Post-Brexit Rally: European Stocks, US Futures At Session Highs

Day three of the post-Brexit rally continues, and after some initial weakness due to concerns about Chinese currency devaluation, both European stock and US equity futures were trading at session highs, facilitated by yesterday's stress test results which saw dozens of US banks unleash a tsunami of stock buyback announcement which in turn pushed S&P futures to new post-Brexit highs.

For Those Who Still Care About Fundamentals, A Troubling Chart

We realize that fundamental analysis, especially in light of recent events, is dead and buried, but for those few who still keep track, here is a troubling chart showing how fast the S&P's cash flow is sinking relative to its debt load. As Bank of America helpfully points out, the USA is now trading at 13x EV/EBITDA, a 90th percentile since 1995.

Bank of America: "If You Are Going To Panic, Panic Early"

"While globalization, immigration and the free market have strong support from the winners of these themes – the plutonomists and the highly educated, in our view they seem to have underestimated the frustration of developed market middle and working classes... We suspect that few will pay attention to these tectonic shifts – it will require more Brexit-type surprises for the message to sink in."

Stress Test 2016: Fed Says All 33 Banks Can Surive 70 VIX Without Needing Outside Capital

While hardly coming as a surprise to anyone, moments ago the Fed announced that all 33 banks have enough capital to withstand a severe economic shock, though Morgan Stanley trailed the rest of Wall Street in a key measure of leverage, Bloomberg reports. The biggest bank cleared the most severe scenario handily, with the exception of Morgan Stanley whose projected 4.9% leverage ratio tied for last place alongside a Canadian bank’s U.S. unit, falling within a percentage point of the 4 percent minimum. As a result of today's "test result" many banks will likely win regulators' approval next week to boost dividends.

As Of This Moment, Barclays Is Not Accepting FX Stop Loss Orders

"Both Barclays Electronic Trading Desk and Barclays Voice Spot Trading Desk will endeavour to operate as close to normal levels of service as the Disrupted Market Conditions allow.  However, taking into account the potential Disrupted Market Conditions during the EU Referendum Period, Barclays has decided to impose certain restrictions on its electronic and voice FX Stop Loss order offering during this period and would like to highlight certain matters with respect to Disrupted Market Conditions."

Frontrunning: June 23

  • ‘Brexit’ Vote: U.K. Heads to the Polls in Historic Referendum on EU Membership (WSJ)
  • The Brits Have No Good Options on Europe Vote (BBG)
  • Stocks Rise With U.S. Futures as Pound Gains While U.K. Votes (BBG)
  • Trump and Clinton Place Bets to Woo Undecided Voters (BBG)
  • China brushes off doubts over support on South China Sea, says it is growing (Reuters)

More Banker Layoffs: RBS To Cut Another 900 Jobs

Bank layoffs are now coming at a rapid pace in what is a clear sign of desperation by the firms to cut costs enough to keep shareholders happy as NIRP continues to hammer bank profits.

The Zombification Of America's Millennials

Nearly four in 10 millennials (39%) say they interact more with their smartphones than they do with their significant others, parents, friends, children or co-workers... the creeping zombification of America continues.

Brazilian Telecom Giant Files Largest Bankruptcy In Nation's History

Brazil’s troubled telephone company Oi SA on Monday filed the largest bankruptcy protection request in the country’s history just days after debt restructuring talks with creditors collapsed. The filing of Oi and six subsidiaries lists 65.4 billion reais ($19.26 billion) in debt.