Bear Market

Tyler Durden's picture

JPM Previews Rising Rates: "In The Short Term, Investors Sell What They Can"





"...we anticipate that the start of US rate hikes will do damage to markets in the short term, but that there will be greater differentiation over a more medium term between liquid and less liquid assets. In the short term, investors sell what they can, making liquid assets more vulnerable." - JPMorgan

 
Tyler Durden's picture

Record Highs? 47% Of Nasdaq Stocks In Bear Market, Down 24% On Average





With the S&P 500 hitting fresh record highs day after day (apart from last week), everything must be great, right? Wrong! As we have noted previously, the leadership in this market is becoming more and more narrowly focused as stunningly 47% of Nasdaq Composite stocks are down at least 20% from their highs with the average stock in the index in a bear market (down 24%). The same is true for the Russell 2000, with over 40% of stocks in bear market and an average drop from recent highs of 22%. By contrast only 31 names in the S&P 500 have seen drops of 20% or more this year. It appears, just as there has been an up-in-quality rotation in credit markets, so stock investors appear to have rotated into momentum winners, chasing returns in an ever-more narrow group of extreme beta stocks.

 
Tyler Durden's picture

Frontrunning: September 15





  • Snow is coming: OECD Cuts Economic Growth Forecasts (WSJ)
  • World waits for white smoke from U.S. Fed (Reuters) - Understandable error: they meant "green"
  • Scots Breakaway at 45% Odds as Economists Warn of Capital Flight (BBG)
  • Ukraine President Poroshenko Faces Backlash Over EU Trade Deal Delay (WSJ)
  • German Anti-Euro Party Advances in Merkel Homeland Voting (BBG)
  • Clinton Hints at 2016 Run as Super-PAC Packs Iowa Steak Fry (BBG)
  • Air France, Lufthansa Hit by Strikes in Fight for Future (BBG)
  • U.S. sees Middle East help fighting IS, Britain cautious after beheading (Reuters)
  • Ex-Billionaire Charged by Brazil With Financial Crimes (BBG)
 
Phoenix Capital Research's picture

Is Your Fund Manager Equipped to Handle a Bear Market in Bonds?





The bottomline: higher rates are coming… and an entire generation of investment professionals are unprepared for it.

 
 
Tyler Durden's picture

Deutsche's David Bianco "Forecasts" The S&P (In One Simple Chart)





While not exactly a "bear", Deutsche Bank's David Bianco - until this weekend - had the lowest S&P 500 target for 2014 year-end at 1,850. That's all changed now...

 
Tyler Durden's picture

Have We Reached A Financial Singularity?





Encouraging and supporting asset bubbles is essentially the only force remaining to keep the system intact as we know it.

 
Tyler Durden's picture

The 'Wages-Fuel-Demand' Fallacy





In recent months talking heads, disappointed with the lack of economic recovery, have turned their attention to wages. If only wages could grow, they say, there would be more demand for goods and services: without wage growth, economies will continue to stagnate. Unfortunately for these wishful-thinkers the disciplines of the markets cannot be bypassed.

 
Tyler Durden's picture

(Un)Comfortable Myths About High Yield Debt





There rarely seems to be a “reason” for why market crashes happen. Market observers are e.g. debating to this day what actually “caused” the crash of 1987. It is in the nature of the beast that once liquidity evaporates sufficiently that not all bubble activities can be sustained at once any longer, bids begin to become scarce in one market segment after another. Eventually, they can disappear altogether – and sellers suddenly find they are selling into a vacuum. Once this happens, the usual sequence of margin calls and forced selling does the rest. Risk premiums normalize abruptly, and there doesn't need to be an obvious reason for this to happen. Compressed risk premiums can never be sustained “forever”.

 
lemetropole's picture

The MOAMOPE by James C. McShirley





The advent of computer generated trading algorithms heralded a quantum leap forward in the quest for 24/7 control of markets. No longer were humans beings required to do such unseemly things as man trading desks or worry a whit if free markets were, if even infrequently, attempting to function. Algo precision has made even the blackest of black swan events seem to turn lily white in their utter non-eventfulness. No more significant Dow or bond crashes, and best of all, no gold rallies exceeding (exactly) 1.00%, or the occasional 2.00%.

 
Tyler Durden's picture

5 Things To Ponder: Interesting Stuff





As a reminder, this kind of market action is neither normal or healthy longer term and has only seen near historical major market peaks. Of course, timing is everything. With the current influx of liquidity coming to an end in October, combined with a plan to start to increasing interest rates in 2015, the Fed has clearly begun to signal the end of 5 years of ultra-accommodative policies. The question that remains to be answered is whether or not the economy is actually strong enough to be removed from "life support?" This weekend's "Things To Ponder" is just a smattering of interesting articles cover a wide range of topics that I hope you will find interesting, informative and contemplative.

 
EconMatters's picture

The Bond Market Explained for Mohamed El-Erian





The fundamental mistake is to think in terms of a low yield telling you anything about the economy, as it is price that you should be focusing on.

 
Tyler Durden's picture

Guest Post: Top 7 Reasons To Buy Silver Now





When considering the catalysts for silver, let’s first ignore short-term factors such as net short/long positions, fluctuations in weekly ETF holdings, or the latest open interest. Data like these fluctuate regularly and rarely have long-term bearing on the price of silver. We're more interested in the big-picture forces that could impact silver over the next several years. The most significant force, of course, is governments’ abuse of “financial heroin” that will inevitably lead to a currency crisis in many countries around the world, pushing silver and gold to record levels; but here are seven more...

 
Phoenix Capital Research's picture

The Coming Tectonic Shift That 99% of Investment Professionals Are Unprepared For





For 40 years, the financial world has experienced a bull market in bonds. What this means is that for 40 years, bond prices have risen while yields fell.  As yields fell, it became easier and easier for investors to borrow money.

 
Tyler Durden's picture

"The Train Wreck Is Coming," David Stockman Warns, "All Hell Will Break Loose"





Train wreck is a pretty good term to describe what is coming.  But this train wreck isn’t simply going to hit a wall out of the blue. Actually, it has been forming and accumulating and expanding for many years now, and yet it has simply been ignored, particularly by the financial markets which have ridden this bubble to these extreme and historic heights. The only issue is, when does it hit the wall?  The answer to that question is it’s not very far down the road, and I can promise you that is when all hell is going to break loose.”

 
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