Frontrunning: June 26

  • Minorities Seen Driving U.S. Household Growth (Reuters)
  • GM prepares to recall some Cruze sedans with Takata air bags (Reuters)
  • PBOC Halts Repos as China Money Rate Climbs to Seven-Week High (BBG)
  • Ukraine Optimism Wavers on Peace as Cease-Fire Winds Down (BBG)
  • Economic Rebound Seen Undercut by Weak Pay as Vote Winner (BBG)
  • Cracks Open in Dark Pool Defense With Barclays Lawsuit (BBG)
  • The Survivor: How Eric Holder outlasted his (many) critics (Politico)
  • IBM, Lenovo Tackle Security Worries on Server Deal (WSJ)
  • Militants take Iraqi gas field town, president calls parliament session (Reuters)
  • Carney Surprises Confounding Markets as BOE Manages Guidance (BBG)

Repackaged Junk Has Never Smelled So Sweet: JPM Forecasts Record $100 Billion In 2014 CLO Issuance

If the Fed is looking for definitive proof of bubble euphoria it should look no further than the CLO market: according to Bloomberg, so far in 2014, more than $46 billion of collateralized loan obligations have been raised, after $82 billion were sold in all of 2013. As a result of this epic dash for repackaged trash, JPMorgan boosted its annual forecast for CLO issuance from $70 billion to as much as $100 billion, which means 2014 may end up as the biggest year on record. We assume it is with great irony that Bloomberg summarizes: "The business of bundling junk-rated corporate loans into top-rated securities is booming like never before after the implementation of regulation aimed at making the financial system safer."

Frontrunning: May 20

  • "May?" New Cold War May Emerge in Ukraine Crisis, Medvedev Says (BBG)
  • Wristslaps will be fast and furious: EU Commission charges HSBC, JPMorgan, Credit Agricole with rigging (Reuters)
  • Credit Suisse Rises as U.S. Guilty Plea Ends 3-Year Probe (BBG)
  • After Martial Law Declaration, Thailand Waits for General's Next Move (WSJ)
  • China property slowdown spells trouble for Asia bonds (FT)
  • Russia Close to $400 Billion Gas Pipeline Deal in Pivot to China (BBG)
  • Dimon-by-the-Sea Shows London Banking’s Engine of Growth (BBG)
  • Modi Faces Greece-Sized Snag to Economic Revival (FT)
  • U.K. Inflation Accelerates on Airfare Surge (BBG)

Frontrunning: May 12

  • Hillary and Me: The 2008 campaign was a nightmare. Will 2016 be as bad?  (Politico)
  • What Timothy Geithner Really Thinks (NYT)
  • Rebels declare victory in east Ukraine self-rule vote (Reuters)
  • Race for AIG's Top Job Has Two Favorites (WSJ)
  • America on the Move Becomes Stay-at-Home Nation for Millennials (BBG)
  • Old, Fired at IBM: Trendsetter Offers Workers Arbitration (BBG)
  • Bad luck Jonathan: Pressure Mounts on Nigerian President (WSJ)
  • Iran leader slams West's 'stupid' missile stance before talks (Reuters)
  • Conchita Wurst of Austria Wins Eurovision Song Contest (WSJ)
  • Greek Finance Ministry expects Q1 GDP contraction of less than 1.5 pct (Kathimerini)

Frontrunning: May 2

  • Ukraine attacks rebel city, helicopter shot down (Reuters)
  • Euro Unemployment Holds Near Record Amid Factory Gains (BBG)
  • Yellen’s Fed Resigned to Diminished Growth Expectations (BBG)
  • Junket Figure's Disappearance Shakes Macau's Gambling Industry (WSJ)
  • China tried to undermine economic report showing its ascendancy (WSJ)
  • Liquidity Trap Hitting AAA Bonds Has ATP CEO Sounding Alarm (BBG)
  • AstraZeneca Snubs Pfizer Approach That U.K. Won’t Block (BBG)
  • Missing Jet Recordings May Have Been 'Edited' (NBC)
  • RBS turns corner as first-quarter profit trebles (Reuters)
  • Japan household spending hits four-decade high, wages key to outlook (RTRS) while Real Incomes Drop 3.3% in March, 6th straight decline

Market In Holding Pattern Ahead Of Jobs Data

Another day where the taken for granted overnight futures levitation is missing (despite a rather rampy USDJPY), indicates that algos are likely waiting for guidance from today's NFP data (buy if beat, buy more if miss) before committing monopoly money. The consensus for today's NFP is 218K, (up from 192K), although as Goldman notes the whisper number is as high as 240K. As DB says, the honest truth is that markets are in one giant holding pattern at the moment with volatility and conviction low. One evidence of this is the AAII weekly sentiment indicator which shows the % bullish, bearish or neutral on the US stock market for the next six months. This week the neutral indicator (40.78) is at its highest level for 9 years. No wonder volumes and volatility are low if investors are lacking a directional bias. Yesterday’s reaction to the ISM manufacturing was interesting. Though the headline number came in firmer than expected (54.9 vs 54.3 expected) and more than 1pt higher than last month’s reading of 53.7, the UST and equity reaction suggested that the data had actually surprised to the downside.

Frontrunning: April 29

  • EU regulators unveil details of bank stress tests (FT)
  • Just use NSAfari: U.S., UK advise avoiding Internet Explorer until bug fixed (Reuters)
  • China’s Income Inequality Surpasses U.S., Posing Risk for Xi  (BBG)
  • US races to refuel infrastructure fund as revenue dries up (FT)
  • New Era Dawns at Nokia as Company Appoints CEO, Plans $1.4 Billion Special Dividend, Share-Repurchase Program (WSJ)
  • Obama reassures allies, but doubts over 'pivot' to Asia persist (Reuters)
  • Dissent at SEC over bank waivers (FT)
  • U.S. Banks to Help Authorities with Tax Evasion Probe (WSJ)
  • U.S., Europe Impose New Sanctions on Russia (WSJ)
  • Why the U.S. Is Targeting the Business Empire of a Putin Ally (BBG)
  • Euro-Area April Economic Confidence Unexpectedly Declines (BBG)
  • Bitcoin traders settle class actions over failed Mt. Gox exchange (Reut

Frontrunning: April 28

  • U.S. Plans to Hit Putin Inner Circle With New Sanctions (BBG)
  • Russian Billions Scattered Abroad Show Trail to Putin Circle (BBG)
  • GE’s Alstom Bid Gains Steam as Hollande Said Not Opposed (BBG)
  • Russia-West tensions pressure stocks, buoy oil prices (Reuters)
  • Toyota Said to Plan to Move U.S. Sales Office to Texas (BBG)
  • Egyptian court seeks death sentence for Brotherhood leader, 682 supporters (Reuters)
  • Greece warned of 14.9 billion euro financing gap (FT)
  • Comcast to shed 3.9 million subscribers to ease cable deal (Reuters)
  • Big U.S. Banks Make Swaps a Foreign Affair (WSJ)

Frontrunning: April 21

  • Putin playing the long game over Russian kin in Ukraine (Reuters)
  • U.S.-Russia Relations Come Full Circle After Ukraine (WSJ)
  • Japan PM makes offering to Yasukuni Shrine, angers China, South Korea (Reuters)
  • In Gold Miners' Talks, Scale Is Crucial: Combined Barrick-Newmont Would Be Able to Trim Costs (WSJ)
  • SEC Said to Weigh Shining Light on Brokers’ Stock Routing (BBG)... and protmply unweigh it
  • Exelon Beating Facebook in S&P 500 After Valuation Scare (BBG)
  • Court Case May Help Define 'Insider Trading' (WSJ)
  • Spanish banks face tough rivalry in small companies bet (Reuters)

Futures Tread Water As Geopolitical Fears Added To Momentum Collapse Concerns

Futures are treading water once more now that Ukraine has stormed to center stage from the backburner after everyone was convinced Putin would let the situation cool off after annexing Crimea. Guess not. Adding the renewed geopolitical jitters to what has already been a beta stock bloodbath into a holiday shortened week assures some high volatility fireworks. Cautious sentiment was observed over in Asia (Nikkei 225 -0.36%) amid renewed fears that geopolitical tensions in Ukraine will flare up again following reports of exchange gunfire with pro-Russian militants. This sentiment carried over into the European session with stocks lower across the board (Eurostoxx50 -0.71%). EUR is lower after ECB’s Draghi said any further strengthening of the EUR would warrant further action by the ECB, including non-standard measures such as quantitative easing - it is amazing how frequently and often the Virtu algos still fall for Draghi's jawboning trick which has now become all too clear will never be implemented and certainly not if he keeps talking about it daily, as he does.

Frontrunning: April 10

  • J.P. Morgan's Dimon Describes Year of Pain (WSJ)
  • SAC Faces a Final Reckoning for 14 Years of Insider Scam (BBG)
  • New Standards for $693 Trillion Swaps Market Increase Risk of Blowup (BBG)
  • China says no major stimulus planned; March trade weak (Reuters)
  • As we said in 2012 would happen: Record Europe Dividends Keep $3 Trillion From Factories (BBG)
  • Blame it on the algo: Deutsche Bank Said to Find Improper Communication in FX Case (BBG)
  • Coke Sticks to Its Strategy While Soda Sales Slide (WSJ)
  • Ukraine’s Rust Belt Faces Ruin as Putin Threatens Imports (BBG)
  • RBC Joins Goldman in Suing Clients After Singapore Crash  (BBG)
  • U.S. House panel to look at aluminum prices, warehousing (Reuters)
  • Brooklyn Apartment Rents Jump to a Record as Leases Surge (BBG)

ABN Amro Ex-CEO Found Dead

A mere two weeks since former JPMorgan banker, Kenneth Bellando jumped to his death, Bloomberg reports that the former CEO of Dutch Bank ABN Amro (and his wife and daughter) were found dead at their home after a possible "family tragedy." This expands the dismal list of senior financial services executive deaths to 12 in the last few months. The 57-year-old Jan Peter Schmittmann, was reportedly discovered by his other daughter when she arrived home that morning. Police declined to comment on the cirumstances of his (and his wife and daughter's) death. This is not the first C-level ABN Amro banker to be found dead. In 2009, former CFO Huibert Boumeester was discovered with (assumed self-inflicted) shotgun wounds.