Equity Markets

SocGen: "Global Earnings Are Back To 2014 Levels; Stocks Are 15% Higher"

"QE sustained equities levels in anticipation of a profit recovery, but rather than de-rating as those earnings came through, markets are simply being propelled to ever higher levels. The equity valuation problem was created during the 2011-15 era when global profits went nowhere, yet equities rose 30%."

"The End Of The QE Trade": Why Bank of America Expects An Imminent Market Correction

... In short, correction late-17 driven by “as good as it gets” narrative; magnitude dependent on CNY, MOVE, tax reform & degree of “forced selling” by ETFs & quant (7 ETFs accounted for 41% of volume of the top 20 most actively traded US issues in 2017; quant hedge funds & CTAs = $1.3tn AUM = 40% of industry total); right now feels more likely single- than double-digit.

Spanish Stocks, Bonds, Euro Sink After Catalan Referendum Fiasco; S&P Futures Rise

While S&P futures were modestly higher, rising 0.1% in a quiet session in which China, South Korea, India and Hong Kong were closed for holidays, the Euro, Spanish stocks and bonds were broadly lower as Spain faces its worst constitutional crisis in years following a dramatic, violent crackdown on Sunday's Catalan independence referendum in which 89% of the voters wanted to secede from Spain.

Global Bond Rout Accelerates Even As Dollar Rally Fizzles

In a continuation of trading patterns observed over the previous two days, on Thursday the global bond rout deepened in the aftermath of the release of President Trump’s tax-cut plan, Janet Yellen's recent hawkish comments and renewed optimism over the health of the U.S. economy.

Dollar Surges, Bonds Dump Ahead Of Trump Tax Plan

S&P futures are set for a higher open (+ 0.1%) despite the expected hit to the Dow from Nike, as European stocks gain while Asian shares dropped. Like yesterday when the big story was the jump in the USD ahead of Yellen's (rather hawkish) speech, so today the greenback's levitation has continued, this time propelled by the imminent unveiling of Trump's tax plan.