Neil Howe Warns The 'Professional Class' Is Still In Denial Of The Fourth Turning

"The world has fundamentally shifted over the last decade, especially since we’ve emerged from the Great Recession... But the professional class has been very slow to understand what is going on, not just quantitatively but qualitatively in a new generational configuration that I call the Fourth Turning. They don’t accept the new normal. They keep insisting, just two or three years out there on the horizon, that the old normal will return – in GDP growth, in housing starts, in global trade. But it doesn’t return."

Revisiting The "No Brainer" XIV-SPY Convergence Trade

At the start of September last year, as stocks began to ramp aggressively off the Black Monday crash lows, we unveiled a rather discomforting "decoupling" that suggested strongly "don't believe the hype." Four months later, and able to remain strongly convicted of the trade, the inverse VIX ETF (XIV) and the S&P 500 ETF (SPY) have recoupled back at the lows from August 24th. We await the recoupling of equity exuberance to credit curmudgeon-ness...

Oil Hovers Near Crucial Technical Level As Rig Count Decline Slows, China Inventory Soars

Overnight weakness on the back of 8-month highs in Chinese crude inventory (combined with the recent plunge in super-tanker rates - i.e. China is no longer refilling its SPR) sent WTI Crude towards the critical $44 level (which has acted as support for 2 months). The China rate cut weakened crude further as PBOC admitted it was needed because of the state of the economy. And then Baker Hughes reported a total rig count unchanged 787 (lowest since April 2002) and an oil rig count decline of just 1 to 594 (the 8th weekly drop in a row). WTI slipped on the news.

The Euro Is Crashing, DXY Almost 100

A sudden plunge in EURUSD - bashing it down towards the 1.04 handle (which would be the lowest since Jan 2003) has sparked a recoupling of equity fantasy down to everything else's reality. Given its weight in EUR, The USD Index has surged to 100.00 - highest since March 2003. EURUSD is now down 35 handles since Draghi started jawboning... when does this "good" collapse morph into "capital flight" concerns?

Crude Carnage Resumes: WTI $52 Handle - New Cycle Lows, Here's Why

Just 3 short days ago, energy stocks were surging and oil was - according to the mainstream media - "stabilizing." Today, we plumb new cycle lows, with WTI back below $53 as every rally is to be sold for now... While no one can resist the temptation to call the bottom in oil, the recoupling of oil-dependent energy stocks from oil appears to the no-brainer trade of January... Here are 3 potential reasons for today's drop.

Volatile Day: Gold, Oil, & Bonds Dump As The Dollar Jumps

Today was a significant day for many markets. For the 7th time in the last 8 months, US Treasuries opened the month with weakness (30Y up 8.5bps, 2Y +3bps from Friday). Significant JPY and GBP weakness pushed the USD Index to fresh 14-month highs (+0.25% on the week). USD strength smacked gold (-$20 to $1265), silver, and crude oil significantly lower (WTI under $93 and Brent testing towards $100, both down over $3). US equities decoupled (lower) from VIX and JPY-carry around the European close after hitting new all-time highs in the early session (over 2,006 for S&P Futs). Volume was better (but then it was a down day). Despite oil weakness, Trannies took off leading the day (with Dow and S&P closing lower from Friday). Credit traded with stocks for most of the day but ignored the late-day VWAP ramp in the S&P, closing at its wides. The ubiquitous late-day buying panic saved S&P 2,000... because it can.


It's Not The Economy; It's "Treasury-Selling" Tuesday Stupid!

It's Tuesday - so bonds are red, idiot. Trannies (-0.9%), rather unusually, underperformed and on the back of yesterday's Russell 2000 weakness suggests beta-chasing muppets are less engaged. After yesterday's USDJPY recoupling, Treasury yields pushed higher once again and almost recoupled with stocks strength from last week. 10Y yields are up 12bps in the last 2 days - the worst 2 days in almost 7 months. The USD leaked modestly lower led by EUR strength. Copper gave back all its gains from the weekend's exuberant China PMI and oil, gold, and silver flatlined. VIX remains total decoupled from this last few days' exuberance. Volume was average - fed by the early plunge but faded rapidly as we levitated.  With regard to the red close for stocks on a Tuesday: it is rumored that a wrong seasonal adjustment factor was applied to today: it was really a Wednesday.

Pump... And Dump

Despite a late-day (very sudden) shellacking in silver, commodities rallied with gold pressing up towards Sept 2013 levels (over $1340). Treasury bonds rallied all day to end near the low yields of the day (-3 to 4bps from Friday). The USD's early losses were unwound as the US day-session continued to leave the greenback modestly lower on the week. And that leaves us with stocks... in almost the exact same pattern as yesterday (except with an overall downward bias) the US open sparked some JPY selling which sent stocks careening to highs only for the European close to smash that hope to smithereens and send stocks limping lacklustrously lower  into the close (recoupling with JPY and Credit). All indices closed red with Trannies underperforming and the S&P (yet again) unable to hold a green year-to-date close.