Recession

Stockman Warns Of "Awful Price To Be Paid For One-Way Markets"

The boys and girls on Wall Street are now riding their bikes with no hands and eyes wide shut. That’s the only way to explain Friday’s lunatic buying spree in response to another jobs report that proves exactly nothing about an allegedly resurgent economy.

Bank of America Throws In The Towel: "The Profits Recovery Won't Live Up To Expectations"

"In the wake of the weaker-than-our-expected 1Q results and recent macro headwinds, we are trimming our S&P 500 EPS forecasts by 3% in 2016 and 2% in 2017. Given the S&P 500’s 15% rally since mid- February, we are concerned that much of the improvement in earnings growth may already be priced in, especially with signs that earnings revision trends may be rolling over."

JPMorgan Says Recession Odds Rise To New Cycle Highs

After edging down to 34% on June 16, JPM's preferred macroeconomic indicator of the probability that a recession begins within 12 months has moved back up and now sits at 37%, the highest it has been in the current economic cycle.

A Precarious State

The global political/economic state feels precarious for a good reason: it is precarious.

Frontrunning: July 8

  • Snipers kill five Dallas police; Obama calls it 'despicable' attack (Reuters)
  • Global stocks regain ground, Treasury near record low as U.S. jobs data looms (Reuters)
  • House Republicans Push for New Hillary Clinton Investigation (WSJ)
  • Obama urges NATO to stand firm against Russia despite Brexit (Reuters)
  • Kremlin says NATO talk of Russian threat absurd, short-sighted (Reuters)

The Reason For The Relentless Scramble For US Corporate Debt In One Chart

While the $5.9tr US IG corporate bond market represents only 12% of that global market, it is now responsible for 33.0% of its total (effective) yield payment. In other words, nearly one in three (global) dollars paid out in the global IG broad market is paid to investors in the US IG corporate bond market.

Dear Janet, What Now? Initial Jobless Claims Tumble To 43 Year Lows

While nonfarm and ADP payrolls data starts to roll over, along with The Fed's labor market conditions indicator, initial jobless claims re-plunged back to its lowest since 1973. A significant drop of 16k to 254k is the lowest - except for a brief April dip - in 43 years...

European Stocks Storm Higher As Bank Fears Subside; US Futures Flat

After yesterday's afternoon surge in US stocks, facilitated by the "uncertain" Fed's FOMC Minutes, today the rest of global market are playing catch up with European stocks rebounding from one week lows, snapping the longest losing streak in three weeks, as well as Asia where most stock markets climbed, led by gains among energy producers as crude prices advanced, while a stronger yen weighed on Japanese shares.

China To Boost "Economic Growth" By Changing Definition Of GDP

Under the new method, the size of the economy is larger than previously estimated; 2015 GDP was revised up by 1.3% to 11tn USD, the Real growth rate was also revised up (rates vary from year to year and averaged 0.06% (6 bps) over the past 5 years). The upward revision is because China’s R&D expenditure growth has been consistently faster than that of overall GDP. With further upward revisions, which appear likely, there should be incrementally lower pressures to reach the growth targets in the coming years.

World's Biggest Asset Manager Downgrades European Banks To Sell, Expects Global Slowdown

"We have trimmed our global growth expectations, and now expect a modest slowdown over the next 12 months. We see risk of a UK recession and European slowdown, as Brexit uncertainties weigh on sentiment. Our new BlackRock Macro GPS “nowcasting” indicator suggests Brexit-related uncertainty has already started to negatively impact UK and global economic growth. We have downgraded European stocks to underweight, with a negative view of the eurozone banking sector."