Equity Markets

Tyler Durden's picture

US Equity Futures Unable To Rally Despite Avalanche Of Bad Global News





Something appears to have changed not only because the USDJPY is not some 100 pips higher overnight on, well, nothing but because the S&P, which is treading water, has yet to spike on no volume reasons unknown. That something may be algos which are too confused to buy ahead of this week's Fed announcement which may or may not have some notable changes in language or the Scottish referendum on the 18th. Or it could simply be that algos are no longer allowed to openly manipulate and rig the market on the CME as of today now that "disruptive market practices" are banned (why weren't they before)? In any case, keep a close eye on the market today: not all is at it has been for a while, unless of course it is still just a little early and the rigging algos (which haven't gotten the Rule 575 memo of course) haven't woken up just yet.

 
Tyler Durden's picture

"Low Volatility Everywhere" - BIS Sounds Alarm Alert On Pervasive Complacency Masking Systemic Shocks





"After the spell of volatility in early August, the search for yield – a dominant  theme in financial markets since mid-2012 – returned in full force. Volatility fell back to exceptional lows across virtually all asset classes, and risk premia remained  compressed. By fostering risk-taking and the search for yield, accommodative monetary policies thus continued to support elevated asset price valuations and  exceptionally subdued volatility."

 
Marc To Market's picture

Technical Overview Ahead of Next Week's Key Events





Simple review of technical condition of the capital markets.  Light on polemical zeal, and heavy on technical analysis.  

 
Tyler Durden's picture

5 Things To Ponder: "Bear-ly" Extant





"It is a bad sign for the market when all the bears give up. If no-one is left to be converted, it usually means no-one is left to buy.” The extraordinarily low level of "bearish" outlooks combined with extreme levels of complacency within the financial markets has historically been a "poor cocktail" for future investment success.

 
Tyler Durden's picture

Futures Slide On Renewed Catalan Independence Jitters, Disappointing Chinese Inflation





Following yesterday's confusing exuberance, which saw the sluggish market rise in the last hours of trading as the latest Scottish poll showed a reverse of the "Yes" momentum (and fading Gartman's latest reco of course), overnight European jitters have re-emerged once more following a speech by Catalonia's Artur Mas, who has long pushed for independence of the region, and who said that while there are different ways Catalonia can vote, the important issue is that Catalans vote somehow. Mas says Spanish govt will likely try to block Catalan vote "the reasons why the central government is blocking the vote are political not legal", which in turn has once again brought attention to Europe's artificial, unstable and temporary political and monetary union, which threatens a reversion of the nightmare days from 2012 when Mario Draghi was promising he would do everything in his power to send the EUR higher (as opposed to now).

 
Tyler Durden's picture

Markets Digest Wristwatch, NIRP Monetization, Catalan Independence News; Push Yields, USDJPY Even Higher





Overnight the most notable move has been the ongoing weakness in rates, with USTs reversing earlier Tokyo gains after BoJ Deputy Governor Iwata, in addition to commenting on a lot of things that didn't make much sense,  said he didn’t see any difficulties in money market operations even if BoJ bought bought government debt with negative yields, as InTouch Capital Markets notes. As a reminder, yesterday we noted that in a historic first the "Bank Of Japan Monetizes Debt At Negative Rates." As Bloomberg notes, this may be interpreted that BoJ may target negative yields to penalize savers, which "all boosts the appeal of yen-funded carry trades." In other words, first Europe goes NIRP, now it's Japan's turn! So while this certainly lit the fire under the USDJPY some more, which overnight broke about 106.50 and hit as high as 106.75 on Iwata's comments, it does not explain why the 10Y is currently trading 2.52% - after all the fungible BOJ money will eventually make its way into US bonds and merely add to what JPM has calculated is a total $5 trillion in excess liquidity sloshing in the global market.

 
Tyler Durden's picture

The Buyback Party Is Indeed Over: Stock Repurchases Tumble In The Second Quarter





We have now done the math and compiled the Q2 earnings for the S&P 500 and we can indeed confirm that (at least in the second quarter) the buyback part is not only over but has ended with a thud, with the total notional amount of buybacks completed in Q2 plunging by 27% in Q2 to "only" $117 billion - the lowest since Q1 of 2013!

 
Tyler Durden's picture

Stocks Tumble To Red For September As Copper, AUD Crumble





US equity markets are sliding this morning on the back of AUDJPY fun-durr-mentals as the USDollar pushes to new 15-month highs (AUD at 6-month lows). This has pressed Nasdaq red for September (joining the Dow, S&P, and Russell). Treasury yields are modestly higher but commodities are sliding with copper the worst... makes us wonder if this is follow-through from China's huge adjustment to CNY overnight.

 
Tyler Durden's picture

US Equity Futures Levitate As Yen Fireworks Continue; All Attention Still On Scotland





While overnight US equity futures have done nothing notable, what everyone's attention has been fixed on, in addition to the GBP and the read-through to all things UK-ish ahead of the Scotland independence referendum, is the sudden flare up in USDJPY trading and volatility, which exploded by some 100 pips in the past 24 hours hitting fresh post-2008 highs, on what appears to be a major capital reallocation move (it surely is not driven by any news) and/or forced squeeze. What is more perplexing is the change in correlations signals, because while until recently the USDJPY was synonymous with the E-Mini, and thus the S&P, as of late the USDJPY pair has moved tick for tick with the 10Year yield: almost as if the NY Fed's favorite HFT trading shop was instructed to change its vast array of signal inputs away from the S&P and to force a gentle levitation in the 10Y.

 
Tyler Durden's picture

Much Dollar Ado About Nothing In Stocks & Bonds





Today some very significant moves across asset-classes - despite the apparent close-to-close 'blahness' of stocks (Dow, S&P, Trannies small red, Nasdaq green) and bonds (30Y unch, 5Y +2bps) from Friday's close. The USD surged to fresh 15-month highs, ripping another 0.6% higher as GBP, EUR (1.28xx), and JPY (106.xx) all faded dramatically. US equity markets entirely decoupled from JPY (in fact became negatively correlated) and US Treasury yields ripped higher - tick for tick with USDJPY's rise. Gold and silver slipped 1% on the day, copper limped higher (after an early plunge) and oil rebounded to close with a small loss near $93 (Brent under $100 for first time in 14 months). Late-day news of 'delayed' sanctions sparked the standard post-EU-close buying panic, regained S&P 2,000 (and Futs hit VWAP), and ensured Friday's bad-news-is-good-news jobs meme stands.

 
Tyler Durden's picture

US Bonds, Stocks Tumble As Dollar Surges On EUR, JPY, GBP Weakness





Turmoil! S&P 500 loses 2,000 and EURUSD breaks to 14-month lows with a 1.28 handle

US equity markets are volatile this morning but appear to have now entirely decoupled from USDJPY as it careens headlong to new 5-year highs  running stops to 106.00. US Treasury yields are tracking the collapse of JPY closely since the US open. EURUSD is also plunging (as did GBP this morning). Abe will be happy as JPY collapses so Nikkei futures surge... is this 'great rotation' from every asset in the world into the Alibaba IPO?

 
Tyler Durden's picture

Goldman Flip-Flops Again - Upgrades Stocks, Bunds, & High-Yield Credit





Just 2 months ago, the illustrious muppet catchers at Goldman Sachs stated that both stocks were 30-45% overvalued but lifted its year-end target in what we subjectively described as 'moronic drivel'. Then, 2 short weeks after that 'upgrade', the same thought-provoking sell-side strategist downgraded stocks on the basis that a 'sell-off in bonds could lead to short-term weakness in stocks'. Now, with the S&P 500 closing at new record highs on the worst employment data of the year, Goldman is at it again - upgrading equities to overweight for the next 3 months, rolling index targets forward, and piling investors into high-yield credit. Welcome to muppetville...

 
Tyler Durden's picture

JPMorgan's 16 Reasons Why The Fed Should Hike Rates (And 5 Excuses For Delaying)





Things are getting a bit hotter for the Federal Reserve regarding the tradeoff between growth and inflation, according to JPMorgan CIO Michael Cembalest. For the last few years, he notes, a zero rate policy was put on autopilot given excess labor and industrial capacity. Both are shrinking now, and when looking at a broad range of variables, some are clearly mid-cycle. If so, in a few months Fed governors will have to jump out of the 0% interest rate pot and remove some of the liquidity that it has infused into the US economy; and, Cembalest warns, despite today's jobs print, they may have to do so at a quicker pace than what markets are pricing in.

 
Tyler Durden's picture

What Mario Draghi Really Did





Some believe that actions today were jointly agreed to by the Fed and ECB to allow the stimulus baton to be passed from one major central bank to another. Could this be to help ease the risk-off fallout that is likely to ensue in anticipation of the first Fed hike? Maybe the price action in US equity markets today should serve as an early warning signal.

 
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