"There may have been some market impact from our trading earlier this week...Our exposure was greatly exaggerated, and our impact on the market was greatly exaggerated... we’ve covered our positions..."
In an ironic twist of fate, it appears the catalyst for many of the biggest and most incomprehensible market ramps of the last few years is a fund called "Catalyst." With around $4 billion under management (before the latest collapse), the levered options fund is run by Edward Walczak who "uses options to create a better risk/return profile."
Snapchat set its valuation between $19.5 billion and $22.2 billion ahead of its IPO, which equates to $14 to $16 a share, near the low end of the $20 billion to $25 billion range the company had originally hoped for.
The global "risk on" melt-up continues. After a modestly hawkish Yellen warned that every meeting is live, and refused to take March off the table, sending the dollar and yield higher and the S&P to fresh record highs, world stocks rose hitting a 21-month high on Wednesday with the dollar rising for the 11th straight day, the longest positive streak since July 2015.
"...waiting too long to remove accommodation would be unwise, potentially requiring the FOMC to eventually raise rates rapidly, which could risk disrupting financial markets and pushing the economy into recession."
After Credit Suisse reported yet another significant loss for the full year 2016, amounting to 2.35 billion Swiss francs, more than the CHF2.07bn expected, the Swiss banking giant said it was looking to lay off up to 6,500 workers and said it was examining alternatives to a planned stock market listing of its Swiss business.
In December, Japan - the largest holder of Treasuries following China's recent sharp selloff - saw domestic investors dump their holdings of by the most since May 2013. “It was a deer in the headlights moment,” said Zoltan Pozsar, a research analyst at Credit Suisse, and it may be about to get much worse.
It is a relatively light week in the US, with mainly trade balance, JOLTS and consumer credit data out. The key economic release this week is University of Michigan consumer sentiment on Friday. In addition, there are a few scheduled speaking engagements from Fed officials this week. 86 S&P 500 companies reporting, representing 11% of the index market cap
Just look at all the government and private debt accumulated on balance sheets around the globe for the last decade, and tell me with a straight face a) this is sustainable, and b) doesn`t have severe consequences.
Business activity in the US Services industry accelerated to its fastest since Nov 2015, according to the 'soft' survey data from Markit, but some firms noted that squeezed margins had acted as a brake on employment growth at their business units in January. ISM Services slipped lower with unadjusted new orders tumbling to their lowest since Jan 2016.
How long can China's debt continue to grow before a Minsky moment or systemic debt crisis? As the government continues to rely on credit-fuelled investment to offset downward pressures within the domestic economy and from a subdued global environment China's debt/GDP ratio is set to rise further. But how much higher can it rise? Here is UBS' attempt to answer the $64 trillion question.
Although the stock market is giddy from President Trump’s pro-growth policies, there is another constituent not quite so enamored with recent developments...the more Trump pushes on the fiscal accelerator, the harder the Fed will lean on the brake.