Those who still assume that US high-paying jobs are doing just fine, the following disclosure from EQR will be disturbing: San Francisco and New York, which account for half of Equity Residential’s projected revenue growth, are seeing a slowdown in hiring for jobs that pay enough to enable renters to afford the new luxury-apartment supply coming in those cities." As Mizuho said "this one is very surprising to us."
Having purged virtually all of his domestic political enemies, it will probably not come as a surprise the head of research as well as the chief strategist at one of Turkey’s largest brokerages was stripped of his professional license and is facing criminal charges over a report analyzing the impact of the July 15 coup attempt, which Erdogan has found "insulting."
A month ago we warned of the looming hyperinflation coming to Nigeria (as well as much of Africa). It appears, following the central banks' rate hike to a record 14% (reach for yield anyone) in an attempt to stall the ongoing currency collapse, that Emefiele is worried, warning of "concern over headline inflation spike." Perhaps most worrying though, amid the chaos, Emefiele advised depositors in banks "to go about your business," adding that there was "no need to panic or worry." Hhhmm..
In a turbulent session for FX, the Yen soared as much as 1.4%, the most in three weeks, after Finance Minister Aso says the government will "leave actual policy measures to BOJ", sending the Nikkei lower by 1.4%. European stocks and U.S. equity index futures are little changed despite the slide in the key carry pair as the Fed starts its two day meeting.
As we said last night when reviewing Elon Musk's "Master Plan", Part Deux, "it's one of those thing you read twice, three times, and then look at those around you to see if you somehow missed the deep message." Judging by the litany of responses by the sell-side this morning, we weren't the only ones confused. As the following reactions from Wall Street analysts, the confusion was far-ranging.
The Dow has closed at a record high for nine days in a row, so it (and U.S. equities generally) MUST be ready for a pullback, right? Not so fast. Thinking that reversion to the mean happens swiftly and reliably is something called “The Gambler’s Fallacy”. To borrow from an old capital markets aphorism, things can stay weird longer than you can stay solvent betting against them.
"Following the attempted coup on July 15, Turkey's political landscape has fragmented further. We believe this will undermine Turkey's investment environment, growth, and capital inflows into its externally leveraged economy. In the aftermath of the failed coup, we believe that the risks to Turkey's ability to roll over its external debt have increased."
It is probably a tie... Although the Saudis caused damage to U.S. shale, they also hit the global oil industry hard; and while they managed to preserve their market share, they paid a heavy price in terms of oil revenues.
While so far the Western diplomatic response to Erdogan's unprecedented putsch has been mostly stunned silence (with just the U.N. human rights chief expressing alarm about the mass suspension or removals of judges so far), the market is starting to get concerned, and moments ago the Turkish Lira suddenly tumbled, sliding below Friday's closing level, while at the same time the MSCI Turkish ETF plunged as well.
This week the S&P 500 surged to a new record high of 2164 this week while the 10-year US Treasury yield touched an all-time low of 1.37%. As a result Goldman, and especially its clients, are stumped. As chief equity strategist David Kostin admits, they have one burning question. As Kostin puts it, they "are struggling to reconcile how extreme valuations of both assets can co-exist."
The tremendous rally of the past 4 days that has sent global stocks soaring in recent days has finally been capped and European shares, S&P futures are all modestly lower following a deadly terror attack in Nice, France. Meanwhile Asian stocks rose as Chinese economic data beat estimates, with Q2 GDP rising by 0.1% more than the estimated 6.6% on the back of stronger housing data.
In a stunning study released today, one which refutes all its prior conclusions on the matter, McKinsey slams the establishment's status quo thinking and admits that the economic gains of changes in the global economy have not been widely shared lately, especially in the developed world. It finds that between 2005 and 2014, real incomes in the world's most advanced economies were flat or fell for 65 to 70% of households, or more than 540 million people.