Institutional Investors

JPM: The Short Squeeze Is Largely Over

"Three quarters of the previous selling of equity ETFs during January and February has been reversed in just three weeks. CTAs appear to have fully covered their shorts. Indeed both CTAs and Discretionary Macro hedge fund managers appear to be close to neutral right now... we conclude that the short covering phase that started a month ago is very advanced."

Buyback Blackout Period Starts Monday: Is This The Catalyst That Ends The S&P Rally?

"Buyback blackout period starts Monday. An increasing number of S&P 500 companies will enter into their blackout period starting next week, about a month before the earnings season kicks into high gear in the third week of April."  This is taking place as institutional clients have been aggressively dumping stocks for the past seven weeks, while corporations have been soaking up all this liquidating activity. Should the selling continue for yet another week, who will soak up the selling this time?

The New New 'Deal' - "Markets Are Too Important To Be Left To Investors"

In the same way that FDR had an existential political interest in generating inflation and preventing volatility in the US labor market, so does the US Executive branch today (regardless of what party holds the office) have an existential political interest in generating inflation and preventing volatility in the US capital markets. Transforming Wall Street into a political utility was an afterthought for FDR; today the relative importance of the labor markets and capital markets have completely switched positions. Today, the quote would be "markets are too important to be left to investors."

"Fear" Indicator Surges To Record High

When it comes to the "here and now", which in the Fed's centrally-planned market is driven almost excusively by momentum ignition algos, complacency indeed rules (VIX 13). But even the merest glimpse into the near future, or rather how the present environment may disconnect with what may happen tomorrow, or next week, or, as the case may be, in three months, institutional investors are more concerned than ever before. But is this a confirmation that the US stock market is about to have a new "Deutsche Bank" moment?

World’s Second Largest Reinsurer Buys Gold, Hoards Cash To Counter Negative Interest Rates

German reinsurer Munich Re is boosting its gold and cash reserves in the face of the punishing negative interest rates from the European Central Bank, it said on Wednesday. Munich Re has held gold in its coffers for some time and recently added a cash sum in in the two-digit million euros, Chief Executive Nikolaus von Bomhard told a news conference.  "We are just trying it out, but you can see how serious the situation is," von Bomhard said.

Peak Online Lending? SoFi Starts Hedge Fund Just To Buy Loans From Itself

Concerns about the health of the US economy and the true state of the labor market will likely mean that demand for marketplace-backed paper won’t exactly be what one would call “robust” going forward. Of course that’s a problem for lenders like SoFi, which pools its loans and sells them to free up space on the books for still more loans. But don’t worry, because SoFi - which originates billions in personal loans - has an idea...

"Dust Off The Tail-Risk Hedges" MKM Warns US Equities Are Entering A "High Volatility Regime"

"Dust off the systematic hedging strategies, and get re-acquainted with the concept of tail-risk," is the ominous conclusion from MKM Partners' Jim Strugger's latest report. Despite every effort from central banks to maintain a low-volatility environment, the magnitude of the August 2015 'shock' not just for U.S. equities but across asset classes, was great enough for Strugger to conclude that a transition into a high-volatility regime had begun. Given the length of the economic cycle, bull market, and the rise in financial stress globally, Strugger warns a transition to a high-vol regime leaves ultimate damage in the &P 500 averaging 53%.

BlackRock Suspends ETF Issuance Due To "Surging Demand For Gold"

BlackRock's Gold ETF (IAU) has seen fund inflows every day in 2016 (no outflows at all) and with the stock trading above its NAV for most of the year, the world's largest asset manager has made a significant decision: It has suspended issuance of Gold Trust shares due to "surging demand for gold." It appears the huge demand for physical gold (and lack of supply) is finally catching up with the manipulation of paper prices.

"The Liquidity Just Dries Up In A Stressed Market" - How HFT Killed FX Trading

Collin Crownover, head of currency management at State Street Global Advisors Inc., which oversees about $2.4 trillion,  who during a panel presentation said that "we are concerned. During volatile periods, market participants are backing away until conditions settle down, making it harder to complete large orders."“A lot of the electronification of the market, which by and large is a good thing, has led to kill switches on a lot of that algorithmic-provided liquidity,” Crownover said. “The liquidity just dries up in a stressed market.”

The Selling Is Back: S&P Futures Tumble Below 1,900; Sterling Crashes, Gold Soars

On Monday, everyone was giddy that the rally is back on. Less than two days later, the dour fatalism of some HFT algo stop hunting price action and a few comments by the Saudi oil minister, and the markets have remember than nothing has changed and that nothing has been fixed. But at least the biggest shorts squeeze in 5 years is finally over.