In the final day of the week, it has again been a story of currencies and commodities setting stock prices, however instead of yesterday's Yen surge which slammed the USDJPY as low as 107.67 and led to a global tumble in equities, and crude slide, today has been a mirror imoage after a modest FX short squeeze, which sent the Yen pair as high as 109.1, before easing back to the 108.80 range. This, coupled with a 3.5% bounce in WTI, which is back up to $38.54 and up 4.9% on the week as speculation has returned that Russia and OPEC members can reach a production freeze deal on April 17, led to a global stock rebound which will see the S&P open back in the green for 2016.
While San Francisco residents appear willing to live in boxes in other people's front rooms, it appears there is another habitat for humans that is becoming more popular in the new normal...
While YHOO shares have jumped after the announcement of several potential bidders (including Time Inc, Verizon, Bain, TPG, and Google), it has merely recovered the day's losses.
Two days after stocks slid in a coordinated risk-off session, and one day after a DOE estimate of US oil inventories sent US stocks surging while the failed Allergan-Pfizer deal unleashed torrential hopes of a biotech M&A spree leading to the single best day for the sector in 5 years, sentiment has again shifted, this time due to a violent surge in the Yen as the market keeps testing the resolve of the Japanese central bank to keep its currency weak, and so far finding it to be nonexistent.
We suspect more than a few 'prosecuted' bankers will be smiling wryly today as, following the exposure of his offshore financial dealings - revealed in the Panama Papers - Iceland's embattled Prime Minister Sigmundur David Gunlaugsson has resigned. Despite earlier refusal to step down, the decision, which was reported by national broadcaster RUV, followed street protests that attracted thousands of Icelanders angered by the alleged tax evasion.
First Panama Papers Casualty? Former Iceland Premier Calls On Current PM To Resign To "Prevent An Uprising"Submitted by Tyler Durden on 04/03/2016 19:15 -0400
Iceland's former PM Johanna Sigurdardottir is calling upon Gunnlaugssonto resign to "prevent a social uprising", and calling on him to “give a straightforward account of all the facts of the matter”. The former finance minister Steingrímur Sigfússon told the Guardian: “We can’t permit this. Iceland would simply look like a banana republic." Essentially, Gunnlaugsson political career is over, and the only question is whether Goldman has already picked a banker to replace him.
While this story reads like a Hollywood movie, my hope is that it shines a light and ignites some much needed discussion on the oft hidden, and thus ignored, graft that permeates our most fundamental societal institutions. In this intricate account I describe the incestuous relationship between FINRA and the Banks. The affects of which can be seen in the cocksure culture of management across the entire sector and that is about to get far worse. However, this is but one root in a forest of consequences impacting everyday people.
Falling profit margins and rising valuations (as earnings fall) make for a pretty bearish one-two punch for the stock market. Investors will surely become less eager to pay higher valuations for companies growing more slowly. That equation usually works in reverse. And there’s no reason we can see to expect these challenges to corporate profit margins to let up any time soon. The S&P 500 now trades at its highest price-to-earnings ratio since the bull market began even as the index remains well off its recent price highs. And profit margins still could have a long way to fall before even reaching their average level since 1950.
We cannot be sure what shape the next crisis will take, although it seems likely that it will be yet another “deflation scare”, mainly caused by falling asset prices. However, we do know what the last crisis of the current system will look like. It will entail a crumbling of the public’s faith in fiat money and the institutions that issue and administer it.
And so the great "oil production freeze" rumor, which helped halt oil's plunge after it hit a 13 year low in early February and forced a 50% short squeeze higher,has died after Bloomberg released an interview with Saudi Deputy Crown Prince Mohammed bin Salman, in which when asked if Iran needs to join freeze, he said: "without a doubt. If all countries including Iran, Russia, Venezuela, OPEC countries and all main producers decide to freeze production, we will be among them."
"We’re going to war — either hybrid in nature to break the Russian state back to its 1990s subordination, or a hot war (which will destroy our country). Our citizens should know this, but they don’t because our media is dumbed down in its “Pravda”-like support for our “respectable,” highly aggressive government."
QE3 ended 17 months ago and shockingly the S&P 500 is exactly where it was 17 months ago. How many bull markets go flat for 17 months? As John Hussman accurately points out, we are experiencing a topping formation in the third and biggest bubble of the last 16 years. It’s a long way down from here.
"There Are No More Hotel Beds At All": Sweden's Tourism Industry Collapses As Resorts Become Refugee CentersSubmitted by Tyler Durden on 03/31/2016 17:40 -0400
Meanwhile, in Sweden, the toursim industry is being choked off by migrant flows. According to SvD Naringsliv, the Swedish Migration Board's move to transform tourist facilities into asylum centers means they'll be no more room for vacationers - literally.
- Roller-coaster first quarter ends with shares, dollar under pressure (Reuters)
- Oil prices slide as U.S. crude stocks hit record (Reuters)
- GE Files to End Fed Oversight After Shrinking GE Capital (WSJ)
- FDA Eases Rules for Abortion Pill, Making Access Simpler (BBG)
- Kremlin denies report of Russia-U.S. deal on Assad's future (Reuters)
- Thirst for Gasoline Fuels Oil Rally (WSJ)
- Landlords in last-minute rush to beat stamp duty rises (BBG)