Following the post-regulatory-change spike in existing and new home sales, pending home sales disappointed with a mere 0.1% rise MoM (missing expectations of a 0.9% rise). The weakness of the forward-looking indicator of home closings was blamed - as usual - on low inventories but also on "sizable losses in the stock market." The 3.1% YoY sales increase is close to the weakest since November 2014.
We have made a contrarian call for a falling silver price and a rising gold to silver ratio for years. This ratio has risen a lot during this time. Are we ready to change our call yet?
After the Fed's statement, one thing was clear: the career economists at the Marriner Eccles building are very confused, admitting to hiking rates for the first time in nine years "even as economic growth slowed late last year". But more confused are the Wall Street economists who follow the Fed and are expected to interpret what the Fed says, means and hints, especially when said Fed has no clue what is going on, like right now. So while their opinions are utterly worthless, for the record, here is what the economisseds see in today's 558 words of sheer Fed confusion.
Fed Back-Pedals Hawkishness, Hints At Policy Error: "Monitoring Global Developments", Admits "Growth Slowed Last Year"Submitted by Tyler Durden on 01/27/2016 16:01 -0400
Treading a fine line between losing all credibility and exposing their total devotion to the stock market, it appears The Fed is maintaining its delusion that everything will be fine as they unwind the largest and most experimental monetary policy of all time, and yet for the first time we get proof that the Fed admits it made an error by hiking into a slowing economy: "labor market conditions improved further even as economic growth slowed late last year.
"The Federal Reserve signaled renewed worry about financial market turbulence and slow overseas economic growth, but didn’t rule out raising short-term interest rates in March."
RANsquawk Preview: FOMC Rate Decision 270116 where focus will be on the Fed's language and any commentary on how many rate hikes we can expect this yearSubmitted by RANSquawk Video on 01/26/2016 14:32 -0400
- After the first rate hike in almost a decade, attention turns to the statement and whether the FOMC remain optimistic on their rate hike forecast.
- An overwhelming majority expect the Fed to keep the Fed Fund Rate on hold at 0.25-0.50%, with FFR futures not pricing in the next hike until the September meeting.
We are told bank earnings and revenue are under pressure from a slew of “tough markets” but what makes those markets so untenable in the first place?
Having laid off 10,000 employees (and boosted his share buyback program by $10 billion - because that has worked out so well in the past), it appears Schlumberger CEO Paal Kibsgaard unleashes some very uncomfortable truthiness on his audience this morning during the earnings call... "For many of our customers, available cash and annual budgets were exhausted well before the halfway point for the fourth quarter... as pricing levels for frackers has dropped into unsustainable territory."
It may not be as sexy as gold and silver, but sometimes even doctor copper needs a little squeeze and corner love as well, and according to Bloomberg, that is precisely what someone is trying to do. One company whose identity is unknown, is "hoarding as much as half the copper available in warehouses tracked by the London Metal Exchange."
On Thursday, we got the latest bad news out of Deutsche as Cryan reported what he called “sobering” results for 2015. In short, the bank is staring down a net loss of €6.7 billion for the year, the first annual loss since 2008. "We see further downside risk on litigation – we model another €3.6bn in 2016 - which is likely to necessitate a capital raise."
- Don’t let the Bear send you into a panic frenzy
- Using a typical hedge strategy with options and futures
- Taking advantage of lower prices to rebalance your portfolio
Bear markets when they happen are never a pleasant event for any investor. Long only investors especially tend to be the worst hit. If you are wealthy enough to invest in Hedge Funds you may be damaged less, if you chose the right managers and the right strategies.
The first week of July 2013 was the last time the Russell 2000 traded at these levels. That is 30 months of buy-and-hold for no return. Despite the constant clammer from "Small Cap fund managers" that they are the plaxce to be for protection against a soaring USD (since they are dominantly domestically focused), it seems the fact that small caps are much more sensitive to credit market conditions is the real reason and that market is carnaging.
Just days after The Fed admitted "we got it wrong" on the "unequivocally good" low oil prices, BP has joined a long list of energy entities slashing jobs. The oil company will cut 4,000 jobs in exploration and production because of toughening market conditions "we need to take specific steps to ensure our business remains competitive and robust."
With China now "murdering" Yuan shorts, markets are content that the Chinese debacle seems to be contained if only for a while, and so the attention of both traders and algos alike has focused on oil, which earlier in the session dragged global equities lower as it dropped by 3%, just shy of the $30 level, a new 11 year low, before staging another dramatic rebound in minutes, wiping out all losses in the aftermath of what appears to have been a deadly suicide bomber terrorist explosion on a square the middle of Istanbul's historic district.
The default of Sherwin Alumina, a US subsidiary of Glencore, refocused the market's attention on the one company which in September was among the hardest hit in the post-China devaluation rout, and the immediate result was that while Glencore stock plunged and is once again approaching all time lows, a more ominous development was that GLEN's CDS spiked to as much as 950 basis points, the highest since April 2009 and suggesting far more pain is in store for the commodity trading giant.