After yesterday's "Hillary rally" in the US, the overnight's session has seen more risk-on sentiment as European stocks advanced, ignoring weakness in Asia as investors followed every twist of shares of beleaguered lender Deutsche Bank, whose CEO last night assured Bill readers that the bank is not seeking a bailout, which however was contradicted by a Zeit article this morning reporting that Germany may seek as much as s 25% "bailout" stake in a worst case scenario.
Until minutes ago, this week's rebound in global equities appeared to be running out of steam as oil retreated from a two-week high and a dollar slide ended. However, as noted just around 6am, Reuters reported, citing as it usually does various "anonymous sources", that in a radical departure from its long-held policy of not cutting production, Saudi Arabia was prepared to cut production on condition that Iran freezes output, which led to an instant spike in crude.
"A recent investigation by Yahoo! Inc. (NASDAQ:YHOO) has confirmed that a copy of certain user account information was stolen from the company's network in late 2014 by what it believes is a state-sponsored actor. The account information may have included names, email addresses, telephone numbers, dates of birth, hashed passwords (the vast majority with bcrypt) and, in some cases, encrypted or unencrypted security questions and answers. "
"I’m now firmly in the camp that not only will the Fed not raise this year – they may not raise again for years. For they are not only “painted into a corner” via their own misdoings – they are chained there by Wall Street. They’ve missed the window..."
And just like that: risk-parity / various other leveraged ‘target risk’ strategies (S&P Target Risk Aggressive Index saw its best day since first week in July yesterday) are back in the driver’s seat, as the Fed and BoJ went back to their “happy place” of a vol-suppression kind of world. That is exactly who / what we are seeing in equities futures, UST futures / curves right now. Lever it up again!
"we routinely monitor asset valuations, while nobody can know for sure what type of valuation represents a bubble, that's only something one can tell in hindsight, we are monitoring these measures of valuation and commercial real estate valuations are high."
Thanks to overnight exuberance in oil (via Venezuela) and the seemingly ubiquitous buying that occurs after every terror attack (see Paris for the best example), US equities have retreated back into the red - led by NASDAQ (AAPL batteries' exloding rumors) - as quad-witching shenanigans have given way to pre-Fed anxiety (despite a 9% chance of a rate hike this week)...
The main reason why last week's market rout was not even worse, is because AAPL, the world's biggest company by market cap and a core pillar of both the S&P and Nasdaq, staged one of the biggest weekly rallies in years following reports of better than expected adoption and pre-order reports from carriers. However, at least according to JPMorgan, it was all a lot of noise and very little signal.