Equity Markets

Global Stocks Rise As Oil Dips; US Stock Futures And Dollar Flat

European and Asian markets rose, while U.S. index futures were little changed, with the Dow Jones Industrial Average pushing for yet another record, as traders digested the Italian referendum news, await the ECB's Thursday announcement and reflect in a notably quieter overnight session.  Oil slipped from a 16-month high after 4 straight days of gains.

20 Years Later, Greenspan's "Irrational Exuberance" Has Become Even More Irrational

December 5, 1996:  “Clearly, sustained low inflation implies less uncertainty about the future, and lower risk premiums imply higher prices of stocks and other earning assets.  But how do we know when irrational exuberance has unduly escalated asset values, which then become subject to unexpected and prolonged contractions?"

European Stocks Soar, US Futures, Euro Jump After Failed Italian Referendum

Another miraculous overnight recovery has eliminated all the bearish aftertaste from the failed Italian referendum. As Guillermo Sampere of MPPM EK put it: "After Brexit, it took three days for markets to shake it off, with Trump it took three hours, with Italy it took three minutes.The fast money, who expected markets to fall further with this outcome, are now covering their positions."

Goldman's Bear Case In 7 Steps: "We Are In The 98th Percentile Of Historical Valuations"

"S&P 500 valuation is stretched relative to history on nearly every fundamental metric. At the aggregate level, the S&P 500 index trades at the 85th percentile of historical valuation relative to the past 40 years. For portfolio managers, the more important fact is that the median S&P 500 company trades at the 98th percentile of historical valuation."

Trump Vs China: Credit Cycles & Gold

As all experience from the past clearly demonstrates, it is a mistake to believe that the gold price is set solely by dollar interest rates, or its relative strength in other currencies. This being the case, the current weakness of the gold price is simply a reflection of temporary dollar shortages, and nothing more.

Initial Jobless Claims Soar Most In 2 Years Following Trump Election

In the two weeks since Donald Trump was elected, initial jobless claims have soared by over 35,000 (or over 15%) to 5-month highs. This is the biggest two-week rise since December 2014 and is entirely against the exuberant narrative being spun by US equity markets. One can't help but wonder what the sudden 'odd' collapse to 43 yeasr lows right into the election was all about...