Consumer Confidence

Crash Risk & The Imminent Likelihood Of Recession

"... there is presently an enormous chasm between the point where self-reinforcing selling pressure by speculators is likely to emerge, and the much lower point where balancing buying pressure by value-conscious investors is likely to support the market. Because every seller necessarily requires a buyer, the enormous gap between the two represents substantial crash risk."

Guest Post: 2016 - Year Of The 'Epocalypse'

As the towering forces that are prevailing against failing global economic architecture and the pit of debt beneath that structure, as laid out below, it is clear that the 'Epocalypse' - encompassing the roots "economic, epoch, collapse" and "apocalypse" - is here, and it is everywhere. The Great Collapse has already begun. What follows are the megatrends that will increasingly gang up in the first part of 2016 to stomp the deeply flawed global economy down into its own hole of debt.

Frontrunning: January 8

  • U.S. jobs market seen fairly healthy despite slowing economy (Reuters)
  • China State Funds Said to Buy More Shares After Market Rout (BBG)
  • Global Stocks Gain Some Respite (WSJ)
  • U.S. Jobs Data Take on Added Importance With Markets in Turmoil (BBG)
  • GOP Health Plans Are Works in Progress (WSJ)
  • For economy czar of crisis-hit Venezuela, inflation 'does not exist' (Reuters)

Global Stocks Crash After Spiraling Chinese Devaluation Unleashes Worldwide Chaos And Selling

Once China set the Yuan fixing some 0.5% lower, the biggest drop since the August devaluation, all hell broke loose and unleashed a global selling panic after China's stock market was promptly shut down less than 30 minutes into trading, then European shares dropped the most in more than 4 months as Asian equities plunges, as did US stock futures, the dollar weakened against the euro and the yen; crude plunged to fresh 12 year lows. Gold rose.

Young Americans' Confidence In Economy Surges As Hopes Of "55 And Older" Shatter

Consumer Confidence among Over-55 Americans is at its lowest since September 2014. On the other hand, confidence among the Under-35 generation is its highest in 9 years (as the lowest income earners saw the largest surge in confidence in history - from 44.2. to 73.4). The 'optimism' gap between young and old Americans has never, ever been greater, which is ironic since it is the 55-and-older generation who have record jobs (while those 25-54 have collapsed since the great recession).

Global Stocks Rebound, US Stocks To Reopen Back In The Green For 2015 As Oil Halts Slide

Santa Claus is cutting it close: after stocks closed down yesterday, and just fractionally red for the year, the jolly old gift-giver (who now has activist investors breathing down his neck) has just three trading days to push if not stocks then the market into the green for the year. And so far, so good, with US equity futures rising by 8 points or 0.4%, on the back of some modest renewed Dollar strength but mostly on oil, which after yesterday's big slide, has managed to stem the decline and is up fractionally, just under $37, along with other commodities if not copper, which falls for second day.

"The Mood Is Tipping" - German Economic Pessimism Surges Following Refugee Influx

Sadly, for Germany, this is precisely what is not happening. According to Deutsche Welle, a new survey has revealed that most Germans believe the influx of refugees will not provide an economic boost, in fact quite the opposite: only 16 percent of those surveyed agreed with the statement "the influx of refugees will result in more economic opportunities than problems for us."  The worst news for Merkel is that a majority of Germans - 56 percent - believe the country is not up to the challenge of dealing with the influx. In small towns of less than 5,000 people, this figure rose to 66 percent.

The Real Reason Behind The Santa Rally

Over the past 20 years, there's been an 87% correlation between S&P performance in 4Q and Holiday Sales. As of right now, the S&P in Dec is now on track to be up - a few days ago it wasn't. Furthermore, the S&P is now up +5.5% above its Sep average. If it holds there, the 20-year regression line below suggests that Holiday Sales will be up +5.4%.

Futures Jump After Friday Drubbing, Despite Brent Sliding To Fresh 11 Year Lows, Spanish Political Uncertainty

In a weekend of very little macro newsflow facilitated by the release of the latest Star Wars sequel, the biggest political and economic event was the Spanish general election which confirmed the end of the PP-PSOE political duopoly at national level.  As a result, there was some early underperformance in SPGBs and initial equity weakness across European stocks, which however was promptly offset and at last check the Stoxx 600 was up 0.4% to 363, with US equity futures up nearly 1% after Friday's oversold drubbing. In other key news, the commodity slide continues with Brent Oil dropping to a fresh 11-year low as futures fell as much as 2.2% in London after a 2.8% drop last week.

Sprott Money's picture

Economic Disaster

Now, slave, get back to work, if you have a job, and make sure you save some energy for your other part time employment as you will be going to those jobs later today. 

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!"

GoldCore's picture

A tragic example of this was seen in Italy in recent days when a pensioner committed suicide after having his life savings wiped out in a bank bail-in. A pensioner from near Rome, hanged himself after his €100,000 (£72,000; $110,000) investment in Banca Etruria bonds were wiped out in a bail-in. A suicide note was left by the pensioner criticising the bank.