Market Conditions

The BDC Consolidation Begins: Ares Buys American Capital For $3.4 Billion

Back during the last bubble, Business Development Corporation (BDC) pioneer American Capital was one of the hottest business models (and most desired companies to work for). However, when the bubble burst, so did the company's stock price, as well as its reputation, and in the past 9 years the company failed to see its stock price recover anywhere near the levels seen during the last bubble. Which is perhaps why moments ago in a dramatic move shaking up the BDC space, ACAS announced it would sell itself to another BDC titan, Ares Capital in a deal worth $3.4 billion.

Global Stocks Slide, S&P Set To Open Red For The Year As Hawkish Fed Ignites "Risk Off"

After yesterday's algo-driven mad dash to close the S&P green both for the day and for the year following Fed minutes that came in shocking hawkish, the selling has continued overnight, led by the commodity complex as rate hike fears have pushed oil back down some 2% from yesterday's 7 month highs, which in turn has dragged global stocks lower to a six-week low, while pushing bond yields higher across developed nations as the market suddenly reprices the probability of a June/July rate hike.

FOMC Minutes Show Cornered Fed "Likely" To Hike Rates In June, Concerned Market Underpricing Risk Of Hike

The supposedly dovish April FOMC statement - as global fears fell and turned domestically - has left bonds and bullion the winners and stocks the losers as investors lose faith in The Fed's forecast and economic promises. Today's FOMC meeting minutes suggest an increasingly cornered Fed will pull the trigger iun June with member disagreements brewing: MOST FED OFFICIALS SAW JUNE HIKE `LIKELY' IF ECONOMY WARRANTED; FED: RANGE OF VIEWS ON WHETHER DATA WOULD SUPPORT JUNE HIKE.  Of course, no matter what narrative the market perceives from these minutes, tomorrow's speeches by Dudley and Fischer (who has been conspicuously quiet recently) will likely give the biggest hint as to what happens next...

The Frogs Are Boiling Again - Why Wall Street Stays In The Pot

Wall Street’s cockeyed faith that another stock market bailout is on the way rests on the idea of a post-election return to fiscal stimulus - since even the casino punters now see that the jig is up on ZIRP, NIRP and QE. Here’s the problem. When General (Paul) Ryan gets together in the oval office with either Hillbama or the Donald next February the budget projections will already be deep in trillion dollar deficits under current policy. Therefore what will get stimulated, if anything, is a colossal political firestorm over who bankrupted the nation. There will not be another fiscal stimulus this go round. This time the frogs of Wall Street will be left to boil.

Global Stocks Jump; Oil Rises As Yen Plunges After Another Japanese FX Intervention Threat

In what has been an approximate repeat of the Monday overnight session, global stocks and US futures rose around the world as oil prices climbed toward $44 a barrel, with risk-sentiment pushed higher by another plunge in the Yen which has now soared 300 pips since the Friday post-payroll kneejerk reaction, and was trading above 109.20 this morning. At the same time base metals regained some of Monday’s steep losses following Chinese CPI data that came in line while PPI declined for 50 consecutive months however showed a modest rebound from the prior month on the back of China's recent, and now burst, speculative commodity bubble.

Who's Telling The Truth On American Jobs - The Fed Or The Government?

For the fourth month in a row, Labor Market Conditions - according to The Fed - have contracted, the longest streak since the financial crisis. At the same time, despite having fallen from recent highs, the government's Labor Department proclaims non-farm payrolls continue to improve... because the narrative of consecutive monthly job gains must stand. The question is - who is telling the truth?

Key U.S. Events In The Coming Week

In the traditional post payrolls data lull, we’re kicking off what’s set to be a much quieter week for data this week with nothing of note due to be released in the US on Monday, however the week picks up with notable economic dataon NFIB small business cofidence, Import prices, PPI and culminates with Friday's retail sales report, UMichigan sentiment and business inventories.

US Futures, Europe Stocks Jump On Oil, USDJPY Surge; Ignore Poor China Data, Iron Ore Plunge

The overnight session has been one of alternative weakness and strength: it started in China where stocks tumbled 2.8% to a two month low following some unexpected warnings in the official People's Daily newspaper and poor trade data. Concerns about China, however, were promptly forgotten and certainly not enough to keep global assets lower, with European stocks gapping higher at the open and rallying from a one-month low, driven by a "surprising" surge in the USDJPY which has moved nearly 200 pips higher since its post-payrolls low. Another driver is the jump in oil, which rallied just shy of $46 a barrel, buoyed by Canadian wildfires that are curbing production and speculation that the Saudi Arabian oil minister succession will be bullish for oil prices.

If Everything Is So Great, Where Are The Unicorn IPOs?

Over the course of the last week it seemed no matter where we turned in the business media one meme was being pushed above all others: It’s still a great time to be a private tech unicorn. Implying, that funding rounds were still “robust.” What wasn’t said, so we will, is this: It’s a great time to be a private “unicorn” rather, than take the chance and become the poster-child for the IPO apocalypse. For it’s better to be assumed a $BILLION dollar success story rather, than IPO and officially open the books to the market and remove all doubt – that you’re not.

Chaos & Volatility Is On The Rise

Things are getting ‘weird’ out there if you’re trying to be polite, and downright 'chaotic' if you're being blunt. Everywhere we look, we see signs that the systems that support us are breaking down.

Three Years After Going Public, Fairway Files Chapter 11

Back in April 2013, during the height of the IPO scramble, the NYT gushed about Fairway's just concluded IPO: "Until recently, Fairway was not much more than a popular market on Manhattan’s Upper West Side, where residents went for goods like smoked salmon, medjool dates and cheeses. Today, it is a fast-growing 12-store grocery chain with ambitions of opening 300 outlets across the country." Just over three years later, the once successful IPO is now a distant memory and soon enough, so will the company behind it because overnight Fairway Group Holdings filed for Chapter 11 bankruptcy protection,

China Manufacturing PMI Disappoints - In Contraction For 14th Straight Month

Despite a trillion dollars of credit spewed into the Chinese 'economy' speculative finance channels, Manufacturing remains in a slump as April's China PMI tumbled to 49.4 after a brief bounce back up to 49.8 (from the 48.0 low in Feb). This is the 14th month in a row of contraction. As Caixin reports, relatively weak market conditions and muted client demand contributed to a further solid decline in staff numbers, which seems to put a nail in the coffin of anyone who believes recent price action in industrial commodities is anything but speculative fervor.

FOMC Statement Key Take Aways: "Fed Leaves Door Open For June Rate Hike"

  1. The April 27 statement downgraded economic activity, said it "slowed", but labor market conditions "improved further" and inflation still expected to rise toward 2% over the medium term.
  2. Removed language that "global economic and financial developments continue to pose risks".
  3. Kansas City Fed's Esther George dissented in favor of a rate hike.