Capital Markets

Frontrunning: February 24

  • Futures drop along with oil prices (Reuters)
  • The U.S. Is the World’s Third-Best Equity Market Since 1900 (BBG)
  • U.S. Talks With Mexico Clouded by Mixed Message (WSJ)
  • A Tea Party for the left? Liberals hope so (Reuters)
  • Kushner, Ivanka Trump Block Attack on Paris Pact (WSJ)
  • Saudi Arabia’s Oil Wealth Is About to Get a Reality Check (BBG)

ValueAct's Jeff Ubben Is Selling On "Overextended Valuations", Builds $3 Billion Cash Pile

Speaking at a Reuters activist conference, ValueAct's Jeffrey Ubben, said that his firm had been taking money out of the capital markets as valuations have become overextended, leaving it with $3 billion in cash.   "I really feel that the large-cap activist plays are very treacherous with high PEs (price-to-earnings) and not a lot of growth."

 

Frontrunning: February 23

  • Trump to Brainstorm on Job Policies With Corporate CEOs (BBG)
  • Border-Adjustment Tax Divides Energy Sector (WSJ)
  • French Bonds Rally After Macron Boosts Presidential Campaign (BBG)
  • Boeing Fighter Jet, Feared Dead, Gets New Life From Trump Tweets (BBG)
  • Treasury Secretary Steven Mnuchin Sees Tax Overhaul by August (WSJ)
  • Why Mexico Is Trump’s First Line of Defense on Immigration (BBG)

Bonds & Bullion Bid As Stocks, Dollar Drop On Fed Warning

March rate hike odds dropped very marginally from before The Fed minutes (from 38% to 34%) but there is a great reaction in capital markets with stocks disappointed by The Fed's warnings and bonds and bullion bid...

How A Major Bank "Calculated" That 20x P/E Is Now "Fair Value"

"Post-election rally closed the valuation gap with the P/E now near “fair”. The current fitted S&P 500 trailing P/E of 19.6x reflects "animal spirits." Accordingly, the current P/E of 19.4x, although high by historical standards, is far from pricing excessive optimism, based on our model." - Barclays

American Express Lists Trump Administration As A Risk Factor In 10-K

"... changes in global economic and business conditions, consumer and business spending, the availability and cost of capital, unemployment rates, geopolitical conditions (including potential impacts resulting from the U.S. Administration and the proposed exit of the United Kingdom from the European Union)"

Putin Orders Russian Media To "Cut Back" On Positive Trump Coverage

Vladimir Putin has ordered Russian state media to cut "way back" on their fawning coverage of President Donald Trump, in what three Bloomberg sources say is a "reflection of growing concern among senior Russian officials that the new U.S. administration will be less friendly than first thought."

Global Stocks Hit 21 Month Highs, Futures Point To New Record Ahead Of Inflation Data

The global "risk on" melt-up continues. After a modestly hawkish Yellen warned that every meeting is live, and refused to take March off the table, sending the dollar and yield higher and the S&P to fresh record highs, world stocks rose hitting a 21-month high on Wednesday with the dollar rising for the 11th straight day, the longest positive streak since July 2015.

Biggest EU Banks Embark On The Mother Of All Debt Binges

Spain’s three biggest banks, Banco Santander, BBVA and Caixa Bank, have got off to a flying start this year having issued €8.6 billion in new debt, seven times the amount they sold during the same period of last year. The last time they rolled out so much debt so quickly was in 2007, the year that Spain’s spectacular real estate bubble reached its climactic peak.

Credit Suisse Announces Another 6,500 Layoffs After Reporting 2016 Loss

After Credit Suisse reported yet another significant loss for the full year 2016, amounting to 2.35 billion Swiss francs, more than the CHF2.07bn expected, the Swiss banking giant said it was looking to lay off up to 6,500 workers and said it was examining alternatives to a planned stock market listing of its Swiss business.

Is Greece Really On The Verge Of Another Financial Crisis?

Just about every adult on earth has seen this show before. Greece faces a debt repayment that it cannot meet... and needs fresh bailout funds. Past budget stringency has failed to relieve Greece’s predicament. If Athens were to unwind this crony-capitalist regulatory regime, it would generate an economic dynamism that Greece desperately needs.