Volatility

Insanity In Japan

Of all the developed countries, Japan is in the worst condition economically. Most others, including the United States, are following the same path to insanity though. Unlike Japan, other countries may have time to implement policy changes that will allow them to avoid Japan’s desperate circumstances.

The Key Thing To Watch For In Today's FOMC Statement

The Fed is expected to stay on hold today. Given the Fed’s dovish reaction to the weak May employment report, SocGen expects that officials are likely to be reluctant to commit to any particular path just yet (despite the longest streak of economically positive surprise in US history). In the absence of any signal regarding the next hike, attention will fall on their characterization of the economy. Here are five things to watch in the statement...

Chinese Stocks Sink Over Fears Regulators Will Curb Wealth Management Schemes

Overnight China's Banking Regulatory Commission drafted new rules curbing the nation’s multi-trillion market for wealth management products, which was not taken well by the local stock market, leading to a plunge in stocks in early Chinese trading, before rebounding at the close of trading. China's ChiNext index of smaller companies sank as much as 5.5%.

Dan Loeb Compares Managing Money In 2016 To A "Game Of Thrones" Slaughter

"Watching Jon Snow’s epic “Battle of the Bastards” scene in the penultimate episode of this season’s Game of Thrones gives investors a sense of how it has felt to manage money during some periods over the past year. Surging enemies forming a seemingly  impossible perimeter, a crush of fellow soldiers on the field, arrows coming in overhead..."

The Day Data-Dependence Died: US Macro Has Longest-Winning Streak In History

Something 'odd' is going on. Amid the plethora of 11-foot-tall-men multiple-standard deviation beats in recent economic data, the Citi Macro Surprise Index did something it has never done before - it rose for 21 days straight. After 18 months of disappointment, out of nowhere, the index ripped higher at the fastest rate since 2009 to its highest since Jan 2014. With China calm, Brexit behind us, US equities at record highs, volatility at near-record lows, and macro data trends never been better... what possible excuse does a 'data-dependent' Fed have for not hiking rates today?

Dead 'Market' Walking: Chinese Stock Volatility Crashes Near Record Lows

When Chinese authorities took over the day-to-day management and support of their collapsing stock market in August 2015, it was not just volume that died. From over 110, short-term volatility in China's major stock market - Shanghai Composite - has collapsed to single-digits this week. This is among the least volatile period in the index's history, despite increased uncertainty around stimulus and economic transition.

What The Sudden Spike In The TED-Spread Really Means

Due to the latest government intervention, differentiating between the signal of real market stress and the noise resulting from the shift due to 2a-7 reform, will now be impossible, and thus it will also be impossible to gauge if there is something truly broken with the market, at least until such a "breakage" becomes all too apparent for everyone to see.

Why Swap Spreads Are Suddenly Blowing Out And Why This Is Good For Treasuries

Over the past week, market watchers have noticed something which otherwise could be seen as a warning signal: there has been a dramatic move in swap spreads space, notably a substantial widening in recent days from what was until recently record tight - and negative - levels, coupled with a blow out in FX swaps, where the EURUSD has seen its cross-currency swap slide -3 bps today to -48 bps, the widest since July 2012. What does this mean, and what are the implications? Read on for the explanation.

Oil Set For Bigger Drop As Historic Gasoline Glut Forces Early Switch To Winter Blends

Refiners are shifting to yet another desperate attempt to delay the inevitable market equilibrium point by switching from summer to winter blend as demand for the former has disappointed. The problem is that by doing so early, stocks of winter blend will fill that much sooner, and absent some miraculous surge in demand in the winter months, the moment when the price of oil tumbles has merely been postponed for a few months while assuring that the drop - when it comes - will be much more acute.

Key Events And Earnings In The Coming Week

The key economic releases this week include consumer confidence on Tuesday, the durable goods report on Wednesday, and the advance release of 2nd quarter GDP on Friday. The July FOMC statement will be released on Wednesday at 2PM. There are several scheduled speeches from Fed officials this week. 197 S&P 500 companies are due to report (or 38% of the index market cap) with the notable names including Apple, Verizon, Facebook, Coca-Cola, Alphabet, Exxon Mobil and Chevron.

Democrats In Turmoil: DNC Chair Wasserman Schultz Resigns After Wikileaks Revelations

The Democratic party was in turmoil on Sunday afternoon, when just hours ahead of the Democratic National Convention which begins on Monday on Philadelphia, the chair of the Party - DNC Chairwoman Debbie Wasserman Schultz - resigned amid a furor over the humiliating Wikileaks email release, hoping to head off a growing rebellion by Bernie Sanders. And in a stunning move, moments later Hillary announced that Wasserman Schultz would serve as an honorary chair on Clinton's campaign.