Capital Markets

Tyler Durden's picture

Presenting Saxo Bank's 10 "Outrageous Predictions" For 2016





"The irony in this year’s batch of outrageous predictions is that some of them are “outrageous” merely because they run counter to overwhelming market consensus. In fact, many would not look particularly outrageous at all in more “normal” times – if there even is such a thing!"

 
Tyler Durden's picture

After The BOJ And ECB, Will Yellen Disappoint Next? SocGen Warns There Is "Risk The Market Will Be Wrong-Footed"





According to ScGen, the Fed is widely expected to start tightening policy on Wednesday and adds that "after the BoJ and ECB, we see a risk that the market will be wrong-footed for a third time, and that extreme positions built ahead of tightening will be reversed.... In particular, we are short US small cap equities vs large via being short Russell 2000 vs S&P 500.... As the Fed tightens and the market enters into a lower-liquidity environment (and higher-volatility regime), we think the premium on small caps is no longer justified."

 
Tyler Durden's picture

Brazil Stocks, Currency Tumble After Fitch Downgrade To Junk





The writing has been on the wall since the S&P "junking" in September, and now Fitch has jumped on the bandwagon, cutting Brazil to BB+, outlook negative. 

 
Tyler Durden's picture

Salient Partners Issues A "Storm Warning" For The Market





There is a Category 5 deflationary hurricane forming off the Chinese coast as Beijing accelerates the devaluation of the yuan against the dollar under the guise of “reform”. I say forming … the truth is that this deflationary storm has already laid waste to the global commodity complex, doing trillions of dollars in damage. I say forming … the truth is that this deflationary storm has driven inflation expectations down to levels last seen when the world was coming to an end in the Lehman aftermath. And now the Fed is going to tighten? Are you kidding me?

 
Phoenix Capital Research's picture

What Happens When Stocks Catch Up With Commodities?





We’ve already gotten a taste of what happens when asset classes finally “adjust” to underlying “demand” with the commodity markets: having operated based on Central Bank money printing for five years, they then wiped out ALL of those gains in six months.

 
Tyler Durden's picture

And Another: Junk Bond Fund Run By Clintons' Close Personal Friend Slammed With Heavy Redemptions





News that billionaire Marc Lasry's Avenue Credit Strategies Fund open-ended mutual fund has been slammed with redemptions in recent weeks will hardly ease fears about a capital outflow from the junk bond which has sent junk ETFs down 12% for the year and has become the main topic of discussion over the past week following a flurry of reports about panic among holders of below-investment grade bonds.

 
Tyler Durden's picture

Fitch Warns Of "Historic Junk Milestone" As US Defaults Surge





Despite the rear-view-mirror-gazing optimists proclamations that default rates have been low (which matters not one jot when pricing the future expectations of default into corporate bond cashflows), Fitch just released its forecast for 2016 defaults and notes that more than $5.5 billion of December defaults has increased the trailing 12-month default rate to 3.3% from 3% at the end of November, marking the 13th consecutive month that defaulted volume exceeded $1.5 billion, closing in on the 14-month run seen in 2008-2009.

 
Tyler Durden's picture

Key Events In The Coming "Fed's First Hike In 9 Years" Week





While this may well be the most important week for capital markets in the past 9 years, when the Fed is widely expected to hike rates on Wednesday, precisely 7 years to the day since it cut rates to zero, here are the other key events to watch out for.

 
Tyler Durden's picture

The Coincidences Are Just Too Eerie: This Is The Last Time CCC Yields Were Here And Rising





When was the last time the same index was at precisely 17.24% and rising? The answer: the weekend Lehman Brothers filed for bankruptcy

 
Tyler Durden's picture

With One Week Left Until The Fed's Rate Hike, Nobody Knows If The Fed Can Actually Do It





We are less than one week away from a historic monetary experiment in two parts: first, attempt the Sisyphean task of pushing up the rate of interest on over $2.5 trillion in excess liquidity, and second, to assure the market that it has correctly priced in the overnight evaporation of up to $800 billion (or more) in liquidity from asset prices. If one or both of these fail to deliver, than the embarrassing disappointment that marked the ECB's December announcement and its dramatic impact on asset prices and FX levels, will be a walk in the park compared to "disappointment" that the Fed will unleash once the market realizes that while in theory the Fed can and is ready to hike, it simply can't do so in practice.

 
Tyler Durden's picture

South African Bonds Crash, Rand Hits Record Low After FinMin Fired





Without giving any reasons, South African President Jacob Zuma has fired his finance minister (after just 19 months in office). This has shocked investors, already anxious about the nation's surging debt and sluggish economy and South African bonds and FX have collapsed andhas given rating agencies “perfect justification” for further downgrades and the loss of investment grade status. 10Y yields spiked 140bps to 10.18% - the highest since July 2008 - and CDS have soared. The Rand has crashed to new record lows above 15 to the USD.

 
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