Equity Markets

Futures, Dollar Slide; European Stocks At 3-Week Lows As "Trump Reality Sets In"

While US stocks closed near session, and all time highs on Friday, the first green close on inauguration day in over 50 years, Monday has seen a modest case of buyer's remorse, with European stocks sliding, Asian shares mixed and U.S. futures lower as the dollar weakened for the 3rd consecutive day to a six-week low, dropping as much as 1% against the Yen, as anxious investors awaited more details of Donald Trump’s policies.

S&P Futures, Dollar Rise As World Awaits Trump Inauguration Speech

"All eyes will be on the content and style of Trump's inauguration speech," Morgan Stanley's Hans Redeker wrote in a note.  "The more 'Presidential' this speech comes across, the better the outcome for markets." And as BonY added, "If Trump ramps up the rhetoric the market will be concerned about building long dollar positions."

Global Stocks Dip; Bond Yields, Dollar Rise After Yellen's Rate Guidance; All Eyes On Draghi

European and Asian shares, and S&P futures slipped, while government bond yields jumped to multi-week highs on Thursday after Yellen's hawkish speech. Oil rose after API reported a drop in crude inventories. The euro rebounded as investors look to Mario Draghi to address rising European inflation that make the ECB's stimulative policies look increasingly out of sync.

Trump's (Not So) Invisible Hand

Want to know why US stocks feel so fragile?  Perhaps we can blame Wall Street analysts.  Even after two months of market buzz about lower taxes, infrastructure spending and less regulation juicing investor expectations for better earnings growth, they refuse to bump their revenue or earnings estimates for 2017.

"Everything Is A Partial Reversal Of Yesterday" - Stocks, Dollar Rebound Following Trump Scare

European shares decline led by a plunge in Pearson shares, S&P futures were modestly in the green as Asian and EM stocks gained. The dollar rebounded against most major currencies after retreating 1.3% on Tuesday to the lowest in a month following Trump's "strong dollar" comments and halted a seven-day drop against the yen. "Everything is just a partial reversal of the price action yesterday," RBC Capital Markets currency strategist Adam Cole said.

The Dallas Pension Fiasco Is Just The Beginning

The recent blow-up of the Dallas Police and Fire Pension System was entirely predictable. The combination of overpriced financial markets, inadequate contributions and overly generous pension promises mean dozens of US local and state government pension plans will end up in the same situation.

Trump Takes On The Deep State

"The deep state" is shorthand for a force within Washington that is able to guide the US' ship of state over periods of time longer than presidential terms, and at times despite the stated intentions of elected officials. If Trump has indeed embroiled himself in a conflict with this entity, then, what does that mean for his policy plans and for the post-Inauguration markets?

Axel Merk On Gold In Presidential Transition Years

Since Nixon took the US dollar off the gold standard in 1971 there have been seven Presidential transition years, i.e., years when a new president was inaugurated. The S&P 500 on average was negative for those seven calendar years of Presidential transition. The average return in Presidential transition years is +14.8% for gold and -0.9% for the S&P 500.

JPM Earnings Jump On Slashed Expenses, FICC Trading Beats As Equity, IB Misses; Credit Card Charge-Offs Spike

In a report that was somewhat similar to that of Bank of America,  JPM reported Q4 revenues of $23.4 billion, beating estimates of $23.1 billion, on EPS of $1.71, far higher than the expected $1.42, which however like in the case of BofA was due to a cut in expenses, which came in at $6.87 billion, far below the $7.2 billion, suggesting even greater expense - i.e. compensation - reductions.

Futures Rise On Friday 13th Ahead Of Deluge Of Bank Earnings; Dollar Continues To Decline

European shares rose as Fiat rebounded on hopes concerns about parallel to Volkswagen are overblown, Asian stocks were little as Chinese shares fell to the lowest level of 2017 after poor export data, and U.S. equity-index futures rose ahead of a deluge of bank earnings. The dollar is headed for a weekly loss and gold trades at the highest price in almost two months.

Jeff Gundlach's Forecast For 2017

Investors will confront excessive debt, high P/E levels and political uncertainty as they enter the Trump presidential era. In response, according to Jeffrey Gundlach, U.S.-centric portfolios should diversify globally.