Equity Markets

Soaring Brexit Fears Spark Global Flight To Safety, Send 10 Year Bunds Tumbling Below 0%

The UK EU referendum is suddenly totally dominant in financial markets. The increased focus comes as the leave campaign has gathered steam as 4 polls yesterday afternoon/evening put the 'leave' campaign ahead. As a result of the continued global scramble for safety, German 10Y bunds finally dropped below 0% for the first time ever, while global risk assets are red around the globe.

"Summer Of Shocks" - 6 Scenarios That El-Erian Sees Slamming Stocks

Most agree that there is a limit to how far central banks can decouple asset prices from fundamentals. With an increasing number of billionaire investors from George Soros to Stan Druckenmiller calling for that reality gap to collapse (amid BofA's "summer of shocks"), it is the timing of that convergence that matters -- particularly when it comes to pinpointing events that could be catalysts for a correction....

Global Stocks Plunge; US Futures, Oil Slide As Brexit Fears "Jolt Markets"

Right now it is all about the immediate fate of the UK, and as Bloomberg explains the "jolted markets" and overnight plunge in global risk assets, "growing anxiety over the prospect of the U.K. exiting the European Union dominated financial markets, sending global stocks down for a third day and the British pound to an eight-week low while boosting demand for havens such as the yen and gold."

Goldman Warns Of "Upward Shock" To Rates, Hints At Trillions In Losses

According to Goldman, here is the unpleasant choice facing the world: continue slowly sinking into a deflationary singularity, coupled with ever greater systemic leverage which makes escape from the ZIRP/NIRP trap impossible as social unrest builds up and ultimately spills over into the streets, or unleash an inflationary impulse, one which crushes countless debt holders, leads to trillions in losses, and requires yet another consolidated bailout.... oh, and also more social unrest.

Sterling Volatility Explodes To Record High As Brexit Looms

With two polls being unleashed on the markets today indicating the largest lead for Brexit over Bremain yet with regard the UK referendum, it seems FX traders at least have begun to wake up to the short-term uncertainties a "leave" vote may entail. A short-term measure of expected price swings for the pound climbed for a third week as traders sought protection as two-week implied volatility, a period that covers the June 23 voting date, closed at its highest on record today.

"It's 2000 All Over Again!"

Mark Yusko pours cold water on whatever bullishly warm feelings the most optimistic folks may have clung to, warning "it's year 2000 all over again." Here are four major parallels he pointed out that make it clear we are heading for another ugly recession—or are already in one without realizing it.

And An Even Louder Warning From Goldman: The "Yellen Call" Is Back And Will Limit Further Market Upside

With financial conditions having significantly recovered, it is reasonable to expect that the Yellen call will soon be back in the money following the June FOMC meeting. We believe June is largely off the table given the weakness of Friday’s employment report and the UK referendum on its EU membership in June. But we think the July meeting is live, without our US Economics team seeing a 40% probability of a second hike. With equity markets posting new highs this week, we think the ‘Yellen call’ is on track to move back into the money in 2016H2.

Futures Slide On Rising Dollar As Global Bond Yields Hit Fresh Record Lows

Please do not adjust your screens: that off-green color you are seeing, that is not a malfunction. Yes, for the first time in six days, global stocks are lower with the MSCI all-country world index dipping from a 6 month high dragged down by lower European and Japanese equity markets, as the USDJPY dropped to a fresh five-week low while Treasury yields continued to hit new record lows because, as Bloomberg explains, "traders assessed the outlook for the global economy."

Goldman Turns Downright Gloomy, Warns Market "Despair" Is Coming, Prepare For A Major Drawdown

As Goldman warns in a note overnight, "Large equity drawdowns often mark the end of an equity cycle and tend to coincide with a recession or financial market/geopolitical shock or a combination, which tend to result in a sharp equity correction driven by a decline in both earnings and valuations." As it turns out, Goldman thinks precisely such a "drawdown" is coming...

Futures Levitate To Session Highs As ECB Enters The Bond Market; Crude Hits $51

In an overnight session dominated by the latest political developments out of the US where Hillary Clinton officially claimed the democratic nomination, the financial newsflow focused on China's trade data, where exports fell 4.1% from a year earlier, in line with expectations, but imports dropped 0.4% from a year earlier, the smallest decline since they turned negative in November 2014, driven entire by soaring "imports" from Hong Kong - aka capital outflows - which soared by 243% y/y.  The other main news was the official launch of the ECB's corporate bond buying, which helped drive government bonds yields in German to new record lows, and the average yields on investment-grade corporate debt below 1%.