In a quiet night for markets, in which the top highlight was the Oscar's historic peddling of best picture "fake news" and where "millions" of Academy members seemingly voted illegally, European stocks were little changed after a selloff that pushed them to a two-week low, while the MSCI Asia index fells as Japan’s Topix dropped for third day. S&P futures were unchanged.
"Vast liabilities are being switched quietly from private banks and investment funds onto the shoulders of taxpayers across southern Europe. It is a variant of the tragic episode in Greece, but this time on a far larger scale, and with systemic global implications."
Tesla shares have quickly given up all gains from the better-than-expected earnings as the sell-side awaits more clarity on the cost and capital raise plans. One analyst specifically took aim at the fourth quarter results, calling out the beat as "phantom" given the exclusion of the SolarCity acquisition from consensus estimates.
"Our global credit impulse (covering 77% of global GDP) has suddenly collapsed: whereas back in Jan '16 the global credit impulse was positive to the tune of 3.8% of global GDP (of which China comprised 3.5% of global GDP) it has now fallen back to -0.1% of global GDP."
According to the latest weekly BofA client data, "smart money" investors have finally tempered their euphoric optimism, and last week during which the S&P 500 climbed to another new high, BofAML clients took advantage of the surge in "greater fools" and turned net sellers of US equities for the first time since the week prior to the US election in early November.
In this holiday-shortened week, attention will be on the US FOMC minutes, housing data and consumer confidence. There will be GDP, PMI and inflation releases across the Euro Area as well as the latest Greek Eurogroup meeting. Look for GDP and public finances data in the UK.
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.
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.
In the latest tightening in China's financial conditions, the China Securities Journal reports that some bank branches in Beijing, Guangzhou and Chongqing have raised mortgage rates for first-home buyers recently.