- European stocks up, oil slides as concerns ease over Russia-Turkey tension (Reuters)
- ECB discusses two-tiered bank charges, broader bond buys (Reuters)
- New agonies, alliances as Fed debates post-liftoff plan (Reuters)
- A New Military Power Rises in the Mideast, Courtesy of One Man (BBG)
- Russia's Gazprom says halts gas supplies to Ukraine over payment (Reuters)
- Other central banks set to act, but Swiss policy cupboard bare (Reuters)
Tiffany Tumbles After Missing EPS, Slashing Guidance; Blames Strong Dollar, "Volatile, Uncertain Conditions"Submitted by Tyler Durden on 11/24/2015 07:25 -0500
Once upon a time, luxury jewelry retailer Tiffany was seen as the bellwether for the global market, however not so much in the New Paranormal when as a result of the company over-reliance on China, and a new focus on aspirational middle-class consumers, the stock had recently been trading at levels not seen in over two years. Things went from bad to worse this morning when the company reported its latest disappointing earning, in which it also slashed full year guidance, blaming a strong dollar, lower tourist spending, as well as "volatile, uncertain economic and market conditions in the U.S. and other regions."
On November 18, the Chairman and CEO of Guotai Junan went missing, and given what we know about China's crackdown on anyone suspected of engaging in activities that might send stocks lower, you know what that means...
- Brussels on Edge as Lockdown Continues (WSJ)
- Stocks Pare Decline as Crude Oil Erases Drop on Saudi Comments (BBG)
- Italy’s Eni Plans to Pump Arctic Oil, After Others Abandon the Field (WSJ)
- Treasuries Decline as Economists Say GDP to Be Revised Higher (BBG)
- Why the Housing Rebound Hasn’t Lifted the U.S. Economy Much (WSJ)
- Argentina Fever Is Back for Investors as Kirchner Rival Triumphs (BBG)
The global economic order is shifting beneath the feet of Washington and Tokyo as Xi marches ahead with "One Belt, One Road" and prepares to extend the first loans from the China-led development bank that embarrassed the Obama administration earlier this year.
As the poor get poorer, so the saying goes, the rich get richer; and until recently that was not just true, but apparently mandated so by The Fed. However, the last few months have seen the so-called "1%" appearing to struggle a little in their largesse. As we noted previously, not only are luxury jet values dropping for the first time since 2009, London mansion prices plunging, San Francisco home sales collapsing, fine-wine and diamond prices at 2009 crisis lows, and Sotheby's laying people off, but now, as Bloomberg reports, Swiss watches - the ultimate in luxury extravagance - have seen exports crash by the most since the financial crisis.
1.3 million transactions were scrutinized, 3,000 accounts were frozen, and according to Jinhua City Public Security Bureau of Economic Investigation Detachment Vice Captain Zhang Hui, it took 35,000 sheets of paper to print out all of the evidence.
- French, U.S. Troops Enter Mali Hotel as Gunmen Hold Hostages (BBG)
- Top suspect seen on CCTV in metro during Paris attacks (Reuters)
- Paris Attacks’ Alleged Ringleader, Now Dead, Had Slipped Into Europe Unchecked (WSJ)
- Global shares march on as alarm bells ring for metals (Reuters)
- European Stocks Rise With Asian Shares as Zinc, Ringgit Advance (BBG)
- World leaders arrive for summit amid heavy security (Reuters)
The arrests or investigations targeting the finance industry in the aftermath of China’s summer market crash have intensified in recent weeks according to Bloomberg, creating a climate of fear among China’s finance firms and chilling their investment strategies. As one professor of Chinese economy noted, "some in the political leadership sought to find scapegoats to blame" for the market crash which along with massive intervention "created uncertainty and anxiety that can only undermine the effort to make these markets work better."
China’s producers couldn’t get the prices they wanted anymore, as early as 4 years ago, and that’s where deflationary forces came in. No matter how much extra credit/debt was injected into the money supply, the spending side started to stutter. It never recovered.
How can so much gold be supplied to China without someone buying it and thus being genuine demand? It cannot. Chinese gold demand as disclosed by the World Gold Council (WGC) is fallacious. We were already missing 2,500 tonnes from the WGC numbers and now we have to add another 604 tonnes...
- France, Russia strike Islamic State in Syria, EU aid invoked (Reuters)
- Pressure Grows for Global Response Against Islamic State After Paris Attacks (WSJ)
- Weakened Hollande Faces Election Backlash in Wake of Attacks (BBG)
- French Official Calls for Metal Detectors at Train Stations (NYT)
- Belgium Raises Terror Threat Level, Cancels Soccer Game vs Spain (BBG)
- Foreign Companies Scrap Paris Events After Terror Attacks (BBG)
Global policymakers have gone to incredible measures to stabilize market, financial and economic backdrops. Yet reflationary measures will continue to only further destabilize. When policy-induced “risk on” is overpowering global securities markets, fragilities remain well concealed. Fragilities, however, swiftly manifest with the reappearance of “risk off.” Rather quickly securities markets demonstrate their proclivity for illiquidity and so-called “flash crashes.” So after an unsettled week in global markets, the critical issue is whether “risk on” is giving way to “risk off” dynamics.
Roughly 21 tonnes, or 685,652 troy ounces of gold in .999 fine kilo bars, was withdrawn, net of a small deposit of 27,328 ounces, from the Brinks warehouse in Hong Kong yesterday. To put that into some perspective, that is the same amount of all gold in the entire JPM warehouse in the US. The point of this is that the price discovery in New York is becoming increasingly distinct from the actual physical supply and demand flows of bullion which are taking place in Asia... And that is a potentially dangerous development, especially with respect to a commodity that is being traded at a leverage in excess of 200:1.
For once, the overnight session was not dominated by weak Chinese economic data (which probably explains why the Shanghai Composite dropped for the second day in a row, declining 1.4%, and ending an impressive run since the beginning of November) and instead Europe took the spotlight with its own poor data in the form of Q3 GDP which printed below expectations at 0.3% Q/Q, down also from the 0.4% increase in Q2, with several key economies rolling over including Germany, Italy, and Spain while Europe's poster child of "successful austerity" saw Q3 GDP stagnate, far worse than the 0.5% growth consensus expected.