Trump does not seem to understand how deeply important NATO or US militarism elsewhere around the globe are to American hegemony under its corporate capitalist system. If and when he does actually try to implement his policy, he will encounter formidable forces that he probably isn’t aware of yet. The last American president who tried to rein in the corporate power of US militarism was John F Kennedy. He was assassinated on November 22, 1963, in broad daylight
Despite the longest winning streak for US macro data in US history, Durable Goods Orders collapsed in June. The 4% MoM plunge (vs -1.4% exp) is the biggest drop since Aug 2014. This represents a 6.6% YoY crash - the biggest drop since July 2015. The drop appears driven by plunge in airplane orders (non-defense aircraft and parts). Worse still, core durable goods orders extended their annual declines to 18 months straight - the longest non-recessionary streak of declines in US history.
The markets were following a rollercoaster night for the Japanese Yen, when after several media headlines Abe was said to have announced a stimulus package that would be more than JPY28 trillion, sending Japanese stocks higher 1.7% while the USDJPY spiked but well off overnight highs, pushing risk assets higher. Europe and US futs were also in the green on optimism from AAPL's earnings, but all eyes will be on today's FOMC announcement.
Due to the latest government intervention, differentiating between the signal of real market stress and the noise resulting from the shift due to 2a-7 reform, will now be impossible, and thus it will also be impossible to gauge if there is something truly broken with the market, at least until such a "breakage" becomes all too apparent for everyone to see.
There was a huge trend change in U.S. gold investment in May. Something quite extraordinary took place which hasn’t happened for several decades. While Switzerland has been a major source of U.S. gold exports for many years, the tables turned in May as the Swiss exported a record amount of gold to the United States.
Yesterday at 2am local time, Japan's Nikkei reported a doubling of stimulus being proposed (to 6 trillion yen) after Goldman suggest 3 trillion was not enough. That spiked USDJPY briefly. Today, at 2am, Nikkei decided to try it again... announcing that "BoJ officials said to be leaning more toward easing," and sure enough USDJPY spiked...
"Most of the quarterly losses came from the short book. An undisclosed oil fracking short (not the Mother-Fracker) was our biggest loser, followed by Amazon, which reported a stronger quarter than we expected. In the long book, Apple (AAPL) and Macy’s were material losers. The earnings estimates for AAPL continue to fall."
"Central banks do their master’s bidding and governments tell them ‘stop recession at any price’... So what we have now is a world in whi ch the Have-nots are rising in number and, thanks to the workings of central banks, see the Haves still seemingly enjoying themselves on the back of rising asset prices. It is no wonder that politics are moving fast to the extremes."
"While seemingly elegant in theory, globalization suffers in practice. That is the lesson of Brexit and of the rise of Donald Trump in the United States. And it also underpins the increasingly virulent anti-China backlash now sweeping the world. Those who worship at the altar of free trade, including me, must come to grips with this glaring disconnect."
There has been little notable market moves overnight, with the record rally in the S&P500 set to continue and European stocks climbing as German IFO business confidence proved more resilient than economists predicted in the month after Britain voted to leave the European Union, falling less than expected from 108.7 to 108.3, above the 107.5 consensus, with expectations printing at 102.2 above the 101.2 expected. Bonds fell with gold as the dollar gained before central bank meetings in the U.S. and Japan this week.
While the G-20 group traditionally tries to put on a united front, a curious divergence emerged following the latest meeting in China, where as Bloomberg notes Chinese and U.S. officials "showed signs of being at odds on how synchronized efforts to boost global growth need to be, with China stressing the need for improved coordination more than the U.S."U.S. Treasury Secretary Jacob J. Lew on Thursday talked down the need for crisis-level coordination as he headed to Chengdu, China, for the meeting.