Financial Regulation

Wall Street Reacts To Steve Mnuchin Choice For Treasury Secretary

Following the news that Steve Mnuchin would be US Trasury Secretary, Wall Street analysts offered mixed predictions on which policies Donald Trump’s choice for Treasury secretary may pursue, as they have little to go on other than Mnuchin’s background with Goldman, buying/selling the former Indy Mac.

Trumpflation Takes A Breather As Global Stocks Rise, Oil Jumps On Renewed OPEC "Deal Optimism"

With the Trumpflation euphoria easing back slightly overnight, leading to a modest paring in the USD index and US Treasury yields, Asian and European stocks rose, while US equity futures rebounded to just shy of new all time highs, as crude jumped on renewed optimism that OPEC will agree to cut output; metals rebounded from last week’s losses as yields dropped and the dollar halted its longest winning streak versus the euro.

Carl Icahn Says Stock Rally May Be Overdone, Calls Trump A "Consensus Builder"

Having turned decidedly bullish in the immediate aftermath of the Trump victory, his supporter Carl Icahn said the strong rally in U.S. stocks since last Wednesday's "shocking" event might be overdone, however he added that investors can expect the president-elect to be a consensus builder who can help fix Washington and improve the economy. "When it runs up like this, I scale off a little bit," Icahn said adding "that doesn’t mean that I am that negative or positive."

Markets In Turmoil: Global Bond Bloodbath, Currency Rout Accelerates As Stocks Erase Early Gains

Monday started off where Friday left off, with the dollar surge continuing, pushing the DXY above 100 for the first time since December, global bond yields soaring, emerging market currencies tumbling, and the Yuan slammed below 6.85 for the first time. However, where Monday is different is that while European stocks and US index futures started off far higher, E-minis have now faded the entire overnight rally and are now red for the session, on concerns that the spike in yields will cap any more stock upside.

As The Dust Settles: Goldman Q&A On Life In Trumplandia

Expect the election result to increase policy uncertainty, warns Goldman Sachs, as a result of an increased pace of legislative action in 2017 without clarity, so far, regarding which issues the administration will prioritize. Over the near-term, much will depend on how financial conditions respond to the policy positions of the new administration. Despite today’s favorable market reaction, investors may take a dimmer view on proposals to raise tariffs or otherwise restrict international trade.

Trump Not Seeking Full Repeal Of Dodd-Frank; Opposes Bank Bailout Provision

In what may be bad news for the financial sector, after opposition to grassroots as well as Congressional republicans, Trump appears to be tempering expectations of a full Dodd-Frank repeal, and according to the WSJ, Trump’s transition team is instead focusing on "rescinding or scaling back individual provisions."

Greenspan Predicts Bond Yields Rising As High As 5%

While the world has learned to take Alan Greenspan's forecasts with a grain of salt, earlier today the former Fed chairman was on Bloomberg TV with another bombastic prediction, warning of a substantial surge in US long-term interest rates, should inflation take hold: "I think up in the area of 3 to 4, or 5 percent, eventually. That’s what it’s been historically."

Key Events In The Coming Week

The key economic releases this week include industrial production on Monday, CPI on Tuesday, and housing starts on Wednesday. There are several scheduled speeches from Fed officials this week. The Beige Book for the November FOMC period will be released on Wednesday.

Janet Yellen Testimony Live Feed: Five Key Things To Look For

This morning, Janet Yellen testifies before the House Financial Services Committee on financial regulation topics. While there us unlikely to be much talk of monetary policy, it may come up, although most of the lawmakers’ questions are likely to relate to the Fed’s oversight of banks; other questions may touch on the Fed's recent bank commodity oversight push, the November election, and especially the recent Wells scandal.

US Futures, European Stocks Rebound, Bonds Fall Ahead Of US Data Deluge

The overnight session started with more weakness out of Asia, where chatter that the BOJ may end up doing nothing despite all the trial balloons (as we hinted yesterday), sent the USDJPY sliding, pushing the Nikkei lower, leading to a 7th consecutive decline in the Topix, the longest such stretch since 2014 even though the BOJ is now actively buying a record amount of ETFs. However, the modest dip in S&P futures and European stocks proved too much for BTFD algos, and risk promptly rebounded.

Republican Platform Unexpectedly Calls For A Return To Glass-Steagall

In an unexpected twist, both major political parties are now pandering to anti-bank sentiemnt, and calling for an overhaul of the financial industry through the return of Glass-Steagall. Paul Manafort, Donald Trump's campaign manager, told reporters gathered in Cleveland Monday that the GOP platform would include language advocating for a return of that law, repealed in 1999 by Bill Clinton. "We also call for a reintroduction of Glass-Steagall, which created barriers between what big banks can do."

Goldman Hires Former EU President As Advisor

Having cornered the central banker market, with its alumni manning key positions at most central banks, Goldman has decided to tip its cards into its next zone of interest: geopolitics, and has done so by hiring none other than the former head of the European Commission, Jean-Claude Juncker's predecessor and one-time Nigel Farage nemesis, Jose Manuel Barroso as an advisor and non-executive chairman of its international business.