Capital Markets

Egypt Stocks Soar, Bonds Rally On Currency Devaluation: "Now The Hard Work Starts"

Given our warning last week (as the black market pound crashed), the devaluation of the Egyptian pound (to 14/$) was not entirely unexpected, but as ECStrat's Emad Mostaque notes, the market was probably in the 11/$ range and so they have surprised to the upside. This will put significant social pressure on society and we could potentially see unrest as Sisi’s support continues to diminish. For now, stocks and bonds are soaring on the currency's crash.

With Q3 Earnings Season Half Done, This Is Where We Stand

With more than half of the S&P500 reporting Q3 results so far, it appears that the earnings recession may finally be ending mostly as a result of the rise in oil prices which have pushed energy earnings higher relative to expectations on a year over year basis, and especially due to surprisingly strong results in the US banking sector.

Moody's Warns Deutsche Bank Is Dangerously Close To Falling Below Its "Default Point"

Moody’s Capital Markets Research issued a damning verdict on Deutsche Bank earlier this week. In a research report put together by the credit agency’s ‘Analytics’ research division, Moody’s analysts write that Deutsche Bank expected default frequency remains at one of the highest levels in the banking industry, despite the bank’s efforts to shore up its capital position.

SocGen Presents The "Toxic" Difference Between QE In The US And Japan

In the US, easy central bank policy leads to greater corporate bond issuance and leverage, which in turn result in companies buying back their own equity - and to that extent QE is now residing on individual company balance sheets. In contrast, in Japan the BOJ simply buys Japanese equities directly. This difference is important

Paul Volcker Explains Why The Fed Can't Raise Rates

"Our current debt may be manageable at a time of unprecedentedly low interest rates. But if we let our debt grow, and interest rates normalize, the interest burden alone would choke our budget and squeeze out other essential spending. There would be no room for the infrastructure programs and the defense rebuilding that today have wide support."

"There Will Be Panic"

"We’ve been in the eye of the storm since then... and it’s a huge hurricane with a big eye... they’ve papered it over with trillion of currency units... Now, as we speak, we’re moving into the trailing edge and it’s going to be much worse, much longer lasting, and much different than the unpleasantness that we experienced back in 2008..."

Two Days After He "Turned Bearish On Equities", Dennis Gartman Is Again "Net Long"

"In our retirement funds here at TGL we bought back into the same non-US steel manufacturing concern that we’d owned previously as it broke out to the upside... we are aggressively long of gold/EUR and we own a leveraged gold mining ETF. We have balanced those positions with bearish equity derivatives sufficient to leave us marginally… very marginally… net long of equities."

Deutsche Bank Pays $38 Million To Settle Silver Manipulation Lawsuit

The scandal-plagued Deutsche Bank agreed on Friday afternoon to pay $38 million to settle US litigation over allegations it illegally conspired with other banks to manipulated and fix silver prices at the expense of investors. A lawyer for the investors said the deal provides "substantial monetary compensation plus cooperation in the continued prosecution of this case against the non-settling defendants."

 

Bank of America Beats: Earnings Rise 7.3% On Rebound In Capital Markets, Expense Cuts

The last big US bank to report Q3 earnings in a 48 hour flurry of bank reports was Bank of America, which moments ago announced that it had earned $0.41 in the third quarter, above the $0.34 expected, driven by $21.6 bilion in revenue, which also beat estimates of $20.8 billion, higher by $600 million compared to a year ago period, as a result of a strong rebound in global market earnings which jumped by 34% from $800 million to $1.1 billion as well as a 22% increase in Global Banking from $1.3 billion to $1.55 billion.