Bank of America

Deutsche Bank Settles With DOJ: Will Pay $3.1 Billion Civil Penalty

With analyst expectations/hopes in the $2 to $5 billion range (against the initial $14 billion fine), Deutsche Bank said it has reached settlement with US authorities to pay a $3.1 billion civil penalty (and provide $4.1bn in releief to consumers). Removing considerable uncertainty about Deutsche's capital position, one wonders how much this remarkably low-ball settlement had to do with Donald Trump's current loan re-negotiations with the "world's most systemically dangerous bank."

In Rare Move, US Sues Barclays For Mortgage Securities Fraud

The market was waiting for the DOJ to announce the long-awaited settlement with Deutsche Bank today. Instead, it got news of a surprise lawsuit filed by the DOJ which sued Barclays after failing to settle a long-running probe into the UK bank's involvement in pre-crisis mortgage fraud.

Markets Award Trump Nobel Prize In Economics

It took only nine days in office for President Obama to be nominated for the Nobel Peace Prize. Likewise, the markets seem to have prematurely greeted Trumponomics as an outstanding success. There’s just one thing: Trump hasn’t done anything yet. We’re still weeks away from his inauguration, and details of his economic plans remain scarce.

"Trump Trade" Leads To Ninth Biggest Weekly Inflow To Equities, More Bad News For Active Managers

The "Trump Trade" continued with global equity funds receiving $21 billion in inflows in the past week according to Bank of America, as investors rushed into reflation assets, while money flowed out of bonds for seventh week in a row. For one more week news for the "active managed" community was negative: of the $20.7 billion in equity inflows, $31 billion was in the form of ETFs, which meant another $10 billion in outflows from mutual funds and other active vehicles.

Banks In Drag - The Russell 2000 Exposed

The recent appreciation in financials is apparently a response to the new administration’s planned policies that are generally viewed as beneficial for the financial sector.  Given the regulatory oppression of the past eight years, this may very well be a sound reason to own bank stocks. However, the R2K index is trading at grossly elevated levels. Owning the index for anything other than pure speculative trading is ridiculous. Owning the index for its bank exposure is insane.

Satellite Imagery Reveals Sharp Retail Spending Slowdown After The Election

Defying consensus, JPM found retail spending activity trends "worsened post the election contrary to stock market moves and color from some management teams" when analyzing satellite image car counts at parking lots. It finds that this is "interesting as it is counter to prevailing thought."

Frontrunning: December 6

  • For Europe’s Unity, 2017 Will Be a Year of Reckoning (WSJ)
  • Oil dips as OPEC, Russian output rises ahead of production cut (Reuters)
  • The Pessimist's Guide to 2017 (BBG)
  • Donald Trump’s Message Sparks Anger in China (WSJ)
  • Brazil’s Reform Plan in Disarray After Senate Chief Removed (BBG)

A Look At This Week's "Other" Big Event

With the Italian referendum now in the rearview mirror, the market's attention focuses on this Thursday's second most important event, the ECB meeting on Thursday. Here are the key questions the market will want answered.