http://www.zerohedge.com/fullrss2.xml/href%25253D/favicon.ico en BofA Institutional Clients Sell Tech Stocks For 3rd Straight Week http://www.zerohedge.com/news/2017-06-27/bofa-institutional-clients-sell-tech-stocks-3rd-straight-week <p>As tech stocks continue to hit new all time highs, the general assumption is that they are being, well, bought by the broader population even if non-growth stocks remain largely shunned. Well, at least according to Bank of America that is not happening. And it's not just tech stocks.</p> <p>In the latest client flow report from BofA' Jill Hall, we learn that last week, during which the S&amp;P 500 <em><strong>climbed </strong></em>0.2%, <strong>BofAML clients were net sellers of single stocks for the third consecutive week</strong>, although the number was almost offset by net buying of ETFs. <strong>Institutional clients were the biggest sellers and have now sold stocks the last two weeks, </strong>while private clients were also sellers following two weeks of buying. Hedge funds were net buyers for the second consecutive week. Clients bought mid caps for the third week in a row, and sold both large and small caps. Buybacks by corporate clients slowed ahead of quarter-end, and continue to track below typical June levels.</p> <p>As for Tech, it appears thatit goes up the more traders sellit: </p> <ul> <li>While hedge funds were buyers of Tech stocks for the second week, <strong>institutional and private clients continued to sell Tech stocks for the third and fifth consecutive week,</strong> respectively. Quarter-end rebalancing may pose risk to Tech, where mutual funds carry their biggest overweight positioning in our post-2008 data history.</li> <li>Energy and Staples stocks saw net selling by institutional clients, hedge funds and private clients alike last week. No sector saw net buying by all three groups.</li> <li>Pension fund clients were net buyers of US equities for the fourth week, chiefly due to ETFs. Single stock buying was mostly in defensive sectors, while the group’s biggest net sales were in Tech and Energy stocks. See Pension fund flows for deta</li> </ul> <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/06/25/bofa%20clients0.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/06/25/bofa%20clients0_0.jpg" width="500" height="285" /></a></p> <p>Some other details: </p> <p>Clients’ biggest net sales last week were in both defensive sectors (Staples, Health Care) and cyclical sectors (Discretionary, Energy and Tech). Only stocks in the bond proxy sectors of Telecom, Utilities and Real Estate – along with the Industrials sector—saw net buying, as interest rates continued to tick downward. Staples—where fundamentals remain challenged—continues to see the longest net buying trend at 11 consecutive weeks, but flow sentiment remains most persistently negative within Health Care, where four-week average flows have been negative since March’16. Telecom has seen four straight weeks of net buying and is the only sector which has seen cumulative net buying year-to-date. </p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/06/25/bofa%20clients%202.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/06/25/bofa%20clients%202_0.jpg" width="500" height="317" /></a></p> <p>Institutional clients were the biggest net sellers, while private clients were also net sellers vs. hedge funds who were buyers. Corporate buybacks continued to slow and remain&nbsp; below typical June levels. Large and small caps saw net sales while clients bought mid caps.</p> <p>Finally, here is the rolling four-week average trends by sector</p> <ul> <li><strong>Net buying: </strong>ETFs since early Oct 2016; Industrials since mid-April 2017; Telecom since mid June 2017.</li> <li><strong>Net selling: </strong>Health Care since mid-March 2016; Consumer Discretionary since mid- Jan 2017; Tech since early March 2017; Staples since early April 2017; Materials since early May 2017; Telecom since late May 2017; Real Estate (not shown; data since Sept. 2016) since mid June 2017; Financials since mid-June 2017.</li> <li><strong>Notable changes in trends: </strong>Energy is now back to seeing net selling after a brief period of buying; Utilities is now seeing net buying after sales since early May ‘17.</li> </ul> <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/06/25/bofa%20clients.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/06/25/bofa%20clients_0_0.jpg" width="500" height="493" /></a></p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="622" height="355" alt="" src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/bofa%20clients0.jpg?1498576910" /> </div> </div> </div> http://www.zerohedge.com/news/2017-06-27/bofa-institutional-clients-sell-tech-stocks-3rd-straight-week#comments Bank of America Bank of America Bond Business Exchange-traded fund Finance Fund Flows Hedge fund Investment Money Real estate S&P 500 Technology Tue, 27 Jun 2017 15:25:07 +0000 Tyler Durden 598765 at http://www.zerohedge.com Warning: a Tech Stock Bloodbath Could Be Just Around the Corner http://www.zerohedge.com/news/2017-06-27/warning-tech-stock-bloodbath-could-be-just-around-corner <p>Tech is ready to implode.</p> <p>The NASDAQ ETF (QQQ) has broken its bull market trendline. Even worse, it has failed to reclaim this line despite a strong bounce. This is a MAJOR warning that the upwards momentum is gone.</p> <p>The next leg down should be a doozy (the target is the red circle on the chart below).</p> <p><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user20289/imageroot/2017/06/05/unnamed.png" style="width: 460px; height: 284px;" /></p> <p>This is a BIG deal for the broader market as even the S&amp;P 500 has seen most of its gain produced by large tech companies such as Apple, Amazon, and the like.</p> <p>Put simply, if Tech goes&hellip; the ENTIRE market will go.</p> <p>With that in mind, let&rsquo;s take a look at the big Tech players.</p> <p>Apple (AAPL): a bearish rising wedge pattern broken after a false breakout to the upside. The stage is set for a bearish reversal.</p> <p><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user20289/imageroot/2017/06/05/sc_0.png" style="width: 460px; height: 284px;" /></p> <p>It&rsquo;s a very similar story for Amazon (AMZN)</p> <p><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user20289/imageroot/2017/06/05/sc-1.png" style="width: 460px; height: 284px;" /></p> <p>As well as Alphabet (GOOGL)</p> <p><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user20289/imageroot/2017/06/05/sc-2.png" style="width: 460px; height: 284px;" /></p> <p>And Nvidia (NVDA)</p> <p><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user20289/imageroot/2017/06/05/sc-3_0.png" style="width: 460px; height: 284px;" /></p> <p>All four of these charts have massive &ldquo;air pockets&rdquo; from current levels down to support. This has the makings of a Tech Crash that will take 90% of investors to the cleaners.</p> <p>But smart investors will use it to make literal fortunes from it.</p> <p>We offer a FREE investment report outlining when the market will collapse as well as what investments will pay out massive returns to investors when this happens. It&#39;s called <strong><u>Stock Market Crash Survival Guide</u></strong>.</p> <p>We made 1,000 copies to the general public.</p> <p>As I write this, only 59 are left.</p> <p>To pick up one of the last remaining copies&hellip;</p> <p><a href="http://phoenixcapitalmarketing.com/stockmarketcrash1.html"><strong>CLICK HERE!</strong></a></p> <p>Best Regards</p> <p>Graham Summers</p> <p>Chief Market Strategist</p> <p>Phoenix Capital Research</p> <p>&nbsp;</p> <p>&nbsp;</p> http://www.zerohedge.com/news/2017-06-27/warning-tech-stock-bloodbath-could-be-just-around-corner#comments Apple Apple Inc. Bearish Rising Wedge Behavioral finance Business Capitalism Economy Finance Investment Investor Market Crash Market trend Money NASDAQ S&P 500 Tue, 27 Jun 2017 15:05:31 +0000 Phoenix Capital Research 598761 at http://www.zerohedge.com FANG Stocks Tumble To 1-Week Lows http://www.zerohedge.com/news/2017-06-27/fang-stocks-tumble-1-week-lows <p>FANG stocks are down almost 3% from yesterday's opening highs, <strong>extending losses quickly today to one-week lows.</strong></p> <p>Having managed to scramble and short-squeeze its way back to the ledge before the tech-wreck, FANG stocks are stumbling hard since yesterday morning's opening panic...</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/06/22/20170627_fang.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/06/22/20170627_fang_0.jpg" width="600" height="313" /></a></p> <p>&nbsp;</p> <p>Netflix continues to lead the charge lower and while Facebook managed to get green briefly yesterday, it is losing again today...</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/06/22/20170627_fang1.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/06/22/20170627_fang1_0.jpg" width="600" height="387" /></a></p> <blockquote class="twitter-tweet" data-lang="en"><p lang="en" dir="ltr">Google, FB, Amazon: The next decade will bring deep political resistance to the platforms that control our lives. <a href="https://t.co/kbgdcX4lTO">https://t.co/kbgdcX4lTO</a></p> <p>&mdash; Dennis K. Berman (@dkberman) <a href="https://twitter.com/dkberman/status/879651341576138752">June 27, 2017</a></p></blockquote> <script async src="//platform.twitter.com/widgets.js" charset="utf-8"></script> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="965" height="504" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20170627_fang.jpg?1498574827" /> </div> </div> </div> http://www.zerohedge.com/news/2017-06-27/fang-stocks-tumble-1-week-lows#comments Film Google Netflix Software Yesterday Tue, 27 Jun 2017 14:50:30 +0000 Tyler Durden 598759 at http://www.zerohedge.com "Massive Cyberattack" Spreads Across Europe, Hits Ukraine, Russia, UK, Denmark http://www.zerohedge.com/news/2017-06-27/ukraine-central-bank-government-airport-go-dark-after-massive-cyberattack-russia-bla <p><em><strong>Update 3:</strong></em> Germany's Merck also confirms it has been affected by the cyberattack:</p> <blockquote class="twitter-tweet" data-partner="tweetdeck"><p lang="en" dir="ltr">We confirm our company&#39;s computer network was compromised today as part of global hack. Other organizations have also been affected (1 of 2)</p> <p>&mdash; Merck (@Merck) <a href="https://twitter.com/Merck/status/879716775021170689">June 27, 2017</a></p></blockquote> <blockquote class="twitter-tweet" data-lang="en"><p lang="en" dir="ltr">We are investigating the matter and will provide additional information as we learn more. (2 of 2)</p> <p>&mdash; Merck (@Merck) <a href="https://twitter.com/Merck/status/879716923923148800">June 27, 2017</a></p></blockquote> <script async src="//platform.twitter.com/widgets.js" charset="utf-8"></script><p>* * * </p> <p><strong>Update 2: </strong>RUSSIAN CENBANK SAYS AS A RESULT OF ATTACKS THERE HAVE BEEN ISOLATED CASES WHERE IT SYSTEMS INFECTED</p> <p>* * * </p> <p><em><strong>Update</strong></em>: in addition to the below listed companies, all of which appear to have been targeted in the global cyberattack including Russia's Rosneft and metals giant Evraz, Danish shipper Maersk, UK ad company WPP, the Ukraine central bank, government and airport, more targets are emerging including Norway's national security authority which has said that a Ransomeware attack is ongoing in Norway "similar to the attack on Maersk", while Russia's Home Credit Bank said all domestic branches are closed because of the cyber attack. </p> <p>As the <a href="https://twitter.com/spectatorindex/status/879715456453562368">Spectator adds</a>, companies in Spain are also now affected by the cyberattack <strong>which appears to be a modification of the "WannaCry" virus</strong>, and has been named "Petya." </p> <p>A Moscow-based cyber security firm, Group-IB, said it appeared to be a coordinated attack simultaneously targeting victims in Russia and Ukraine, <a href="https://www.reuters.com/article/us-cyber-attack-idUSKBN19I1TD">according to Reuters</a>.</p> <p>* * *</p> <p>Now that CNN is officially out of the "<a href="http://www.zerohedge.com/news/2017-06-27/cnn-exposed-undercover-sting-producer-admits-russia-story-fake-news-pushed-ratings-0">Russia hacking" fake news business</a>, the Ukraine has decided to fill in the void, and moments ago Ukraine's Deputy Prime Minister Pavlo Rozenko said that the government's computer network was down, in what he claimed was a "massive cyberattack", one which has also impacted the central bank, power plant and airport, and promptly blamed Russia for being behind the attack without a shred of evidence. To "prove" the accusation, he posted a picture on Twitter of a computer screen showing an error message.</p> <p>“We also have a network 'down',” he wrote. “This image is being displayed by all computers of the government.” The photo showed his PC displaying a message claiming a disk “contains errors and needs to be prepared”, urging the user not to turn it off. </p> <blockquote class="twitter-tweet"><p dir="ltr" lang="uk">??-???! ??????????? ??? ?? ???? ??? "????????". ?????? ??????. <a href="https://t.co/J2yoPPe37n">pic.twitter.com/J2yoPPe37n</a></p> <p>— Rozenko Pavlo (@RozenkoPavlo) <a href="https://twitter.com/RozenkoPavlo/status/879679499687821312">June 27, 2017</a></p></blockquote> <script src="//platform.twitter.com/widgets.js"></script><p>According to local press, numerous Ukrainian institutions were hit by a wave of cyber attacks earlier in the day, including banks, the state energy distributor and Kiev's main airport. "We also have a network 'down'," Rozenko said on Facebook. </p> <p>Ukrainian state-run aircraft manufacturer Antonov was among the companies hit, along with state power distributor Ukrenergo, which said the attack did not affect power supplies.</p> <p>According to <a href="https://www.bloomberg.com/news/articles/2017-06-27/ukraine-russia-report-ransomware-computer-virus-attacks">Bloomberg</a>, Kievenergo, a Ukrainian utility, switched off all computers after the hack, while another power company, Ukrenergo, was also affected, though “not seriously,” the Interfax news service reported. Ukrainian airports and railways are operating as usual, according to the Russian news service.</p> <p>Ukrainian delivery network Nova Poshta halted service to clients after its network was infected, the company said on Facebook. Ukraine’s Central Bank warned on its website that several banks had been targeted by hackers.</p> <p>After the attack, Ukraine quickly went for the empathy points, tweeting a meme from its official Twitter account. </p> <p>“Some of our gov agencies, private firms were hit by a virus. No need to panic, we’re putting utmost efforts to tackle the issue,” the account tweeted. Attached was an infamous "this is fine" gif.</p> <blockquote class="twitter-tweet"><p dir="ltr" lang="en">Some of our gov agencies, private firms were hit by a virus. No need to panic, we’re putting utmost efforts to tackle the issue ???? <a href="https://t.co/RsDnwZD5Oj">pic.twitter.com/RsDnwZD5Oj</a></p> <p>— Ukraine / ??????? (@Ukraine) <a href="https://twitter.com/Ukraine/status/879706437169147906">June 27, 2017</a></p></blockquote> <script src="//platform.twitter.com/widgets.js"></script><p>* * * </p> <p>So who's to blame? <em>Why Russia of course. </em></p> <p>Speaking to <a href="http://en.interfax.com.ua/news/general/432029.html">Interfax</a>,the advisor to the Interior Minister of Ukraine, MP Anton Gerashchenko said that "a huge cyber-attack at Ukrainian companies on Tuesday has been organized by Russian intelligence services and it is one of the elements of the hybrid war against Ukraine, </p> <p><strong>"The intrusion is the biggest in Ukraine’s history,” Gerashchenko wrote on Facebook. The goal was “the destabilization of the economic situation and in the civic consciousness of Ukraine,” </strong>though it was “disguised as an extortion attempt,” he said.</p> <p>"A huge cyber-attack has been started against Ukraine. It was done under the disguise that it is allegedly a virus… <strong>According to the preliminary information, this is an organized system, a kind of training by the Russian intelligence services</strong>. The attack aims at banks, media and transport communications," he said on 112.Ukraine TV Channel on Tuesday.</p> <p>One wonders if that preliminary information came from the same FBI that incorrectly claimed the Qatar hack was organized by Russia, when Qatar itself later blamed the "blockade" countries as being behind it. </p> <p>Gerashchenko said that the virus reached computers during several days and even weeks via getting mails. "Today, at 11:00 [the computers] that were affected by the virus in advance were activated. Thus, this is another example of using cyber-attacks in the hybrid war against our country," he said.</p> <p>"I think that soon officers of the SBU, the cyber security department of the National Police will unveil the ways how this virus reached the targets and they propose the options to tackle the problem," he said.</p> <p>* * * </p> <p>Meanwhile, the fall out in Ukraine, which claimed the cyberattacks are a modified version of the "WannaCry" virus, has been extensive with Ukrainian state-run aircraft manufacturer Antonov among the companies reportedly hit, along with state power distributor Ukrenergo, which said the attack did not affect power supplies. The National Bank of Ukraine said an “unknown virus” was to blame, saying several unnamed Ukrainian banks were affected&nbsp; along with financial firms. </p> <p>“As a result of cyber attacks, these banks have difficulties with customer service and banking operations,” a statement said. </p> <p>“The National Bank bank is confident that the banking infrastructure's defense against cyber fraud is properly set up and attempted cyber attacks on banks' IT systems will be neutralised.”</p> <p>Oschadbank, one of Ukraine's largest state-owned lenders, said some of its services had been affected by a “hacking attack” but guaranteed that customer data was safe. </p> <p>Computers and departure boards at Boryspil International Airport in Kiev – the largest in Ukraine – were also down. “The official site of the airport and the scoreboard with the schedule of flights aren't working!” the airport’s acting director, Pavel Ryabikin, wrote on Facebook.</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/06/25/ukraine-cyber-attack.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/06/25/ukraine-cyber-attack_0.jpg" width="500" height="375" /></a></p> <p>* * * </p> <p>It wasn't just Ukraine however. As The Independent writes, Danish shipping giant Maersk said its IT systems were down across “multiple sites and<br /> businesses due to a cyber attack”, although it was unclear whether it<br /> was related to the situation in Ukraine. The congolmerate is the largest container shipping<br /> company in the world and also operates in the oil and gas sectors. </p> <p>Russia's Rosneft, a government-owned oil firm, also said it was targeted by a “massive hacker attack” on its servers, as was steel maker<br /> Evraz. "The cyber attack could lead to serious consequences, however, due to<br /> the fact that the Company has switched to a reserve control system,<br /> neither oil production nor preparation processes were stopped,” a<br /> statement from Rosneft&nbsp;said.</p> <p>British advertising company WPP also said several units were affected by a suspected cyber attack.</p> <p>Or, as Reuters summarizes: </p> <ul> <li><strong>SWISS GOV'T AGENCY SAYS UKRAINE, RUSSIA, ENGLAND AND INDIA ARE MOST AFFECTED BY VIRUS, NO INDICATION THAT SWISS COMPANIES AFFECTED</strong></li> <li><strong>SWISS GOV'T AGENCY SAYS THERE ARE INDICATIONS THAT PETYA RANSOMWARE VIRUS IS CIRCULATING AGAIN </strong></li> </ul> <p>It was not clear how and why Russian hackers would be able to hack the entire world, Russia included, but that probably does not matter: Ukraine has blamed Russia for repeated cyber attacks targeting<br /> crucial infrastructure during the past three years, including one on its<br /> power grid that left part of western Ukraine temporarily without<br /> electricity in December 2015. Today was just a continuation, and after all the world still demand Russia hacking narratives. </p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="295" height="171" alt="" src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/russian%20hacker_1.jpg?1498573121" /> </div> </div> </div> http://www.zerohedge.com/news/2017-06-27/ukraine-central-bank-government-airport-go-dark-after-massive-cyberattack-russia-bla#comments Computer network security Computer security Cryptography Cyberattack Cyberattacks Cybercrime Cyberspace Cyberwarfare December 2015 Ukraine power grid cyberattack Europe Fake news FBI Federal Bureau of Investigation gif Government India Modern history of Ukraine National Bank of Ukraine national police national security National security Norway Organization of Ukrainian Nationalists Pavlo Rozenko Politics of Ukraine Ransomware Reuters Russian intelligence Security Security engineering Social engineering Technology Twitter Twitter Ukraine Ukraine Ukraine central bank Ukraine’s Central Bank Viktor Gerashchenko WannaCry ransomware attack Western Ukraine Tue, 27 Jun 2017 14:45:26 +0000 Tyler Durden 598754 at http://www.zerohedge.com Janet Yellen's Monetary Policy Just Eased 50 bps and She Can’t Be Happy - by Michael Carino - Greenwich Endeavors http://www.zerohedge.com/news/2017-06-27/janet-yellens-monetary-policy-just-eased-50-bps-and-she-can%E2%80%99t-be-happy-michael-carin <p>&nbsp;</p> <p style="margin: 0in 0in 8pt;"><span style="font-family: Calibri; font-size: small;">Over the last two months, the Fed has tried to continue to communicate<br /> that they plan on raising rates up to at least 3% and reduce their balance<br /> sheet by trillions. &nbsp;They just raised the<br /> Fed Funds rate by 25 bps to 1.25%. However, long term rates rallied by 50 bps! &nbsp;&nbsp;And the<br /> short end of the interest rate curve is priced with yields on top of the Fed<br /> Funds rate.&nbsp; This implies that either the<br /> Fed is lying and does not plan to raise rates again (or even lower rates), or<br /> something is broken in the bond market.</span></p> <p>&nbsp;</p> <p style="margin: 0in 0in 8pt;"><span style="font-family: Calibri; font-size: small;">After a decade of manipulation in rates by central banks<br /> globally, bond markets are priced at some of the richest conditions ever.&nbsp; There could not be a greater disconnect with<br /> actual economic conditions.&nbsp; Globally,<br /> there is no crisis on the horizon and sovereign risks could not be lower.&nbsp; GDP is tracking close to above average 3% and<br /> inflation right on 2%. &nbsp;Spare capacity<br /> near or at a cycle low, increasing the probability that inflation is going to<br /> run too hot going forward. </span></p> <p>&nbsp;</p> <p style="margin: 0in 0in 8pt;"><span style="font-family: Calibri; font-size: small;">So why did long term rates recently rally 50 bps? &nbsp;Such a large move surely comes on the heels of<br /> a financial crisis or recession.&nbsp; No,<br /> this move comes from the excessive conditions built over the last decade in the<br /> bond market. &nbsp;When such extremely<br /> disconnected conditions exist, the probability of a financial crisis from an<br /> unwind of these conditions is extremely high. &nbsp;The latest move to lower rates, even as the<br /> Fed is trying to normalize rates is due to the manipulation of bond markets by<br /> a consortium of large balance sheets that trade Treasuries in high volume<br /> during low volume periods.&nbsp; This is the<br /> strategy pursued in 2006 and 2007 and led to flattening of yield curve and<br /> diminished volatility as Fed raised rates.&nbsp;<br /> These high volume strategies take advantage of a soft Fed that<br /> telegraphs every step and stretches out their policy moves over long periods of<br /> time.&nbsp; This leads to high volume<br /> strategies believing the Fed issued a put on rates and therefore excessive<br /> risks can be taken to profit in the short run. </span></p> <p>&nbsp;</p> <p style="margin: 0in 0in 8pt;"><span style="font-family: Calibri; font-size: small;">Mohamed A. El-Erian, bond market veteran and specialist<br /> wrote today that the Fed should continue to raise rates “and that policy makers<br /> should take seriously the growing risk of future financial instability,<br /> especially in the absence of a carful normalization”.&nbsp; Other Fed officials, including the Fed’s vice<br /> chairman, William Dudley has also been sounding the alarms of a bond market out<br /> of control and resulting future financial instability. &nbsp;The bond market has turned into a game of no<br /> limit poker played by the biggest balance sheets and finally the alarm bells<br /> are getting rung.</span></p> <p>&nbsp;</p> <p style="margin: 0in 0in 8pt;"><span style="font-family: Calibri; font-size: small;">When the Fed tightens, rates usually rise as markets prepare<br /> and adjust for the tightening cycle and resulting risks. &nbsp;Real rates can adjust to over 300 bps. &nbsp;Real rates today are close to 0%.&nbsp; Unlevered bond market losses can hit a<br /> staggering 50% if rates normalize. </span></p> <p>&nbsp;</p> <p style="margin: 0in 0in 8pt;"><span style="font-family: Calibri; font-size: small;">When rates are more normalized and the Fed raises rates, the<br /> yield curve usually flattens as short term rates converge with long term rates.&nbsp; However, this time, just like in 2008,<br /> conditions have been so easy, traders use high volume strategies to squeeze<br /> market participants hedging or holding off on future purchases and make yields<br /> actually rally lower. This leads to significant future financial instability<br /> with substantial volatility and potential impacts in the real economy.</span></p> <p>&nbsp;</p> <p style="margin: 0in 0in 8pt;"><span style="font-family: Calibri; font-size: small;">The Fed wants to avoid the same mistakes but at the same<br /> time does not want to be held responsible if history repeats with a financial<br /> crisis.&nbsp; They will try to talk rates to<br /> normalization and Fed officials are currently trying to do so.</span></p> <p>&nbsp;</p> <p style="margin: 0in 0in 8pt;"><span style="font-family: Calibri; font-size: small;">But with each speech, market starts to move in the direction<br /> of normalization only to be met with high volumes pushing market to even lower<br /> yields. The Fed has to get real and stop this habitually bad behavior. &nbsp;They need to increase volatility in the bond<br /> market and let the volatility regulate bad behavior. The Fed is too transparent<br /> and traders are using a lower volume period – summer months – and lack of economic<br /> releases to push markets around like poker players do. &nbsp;These traders are using the Fed’s proven<br /> misguided monetary policy (which is a repeat of 2006-2007 and we know how that<br /> ended up) as a perceived put option on rates and exercising it with a high<br /> volume long biased trading strategy.&nbsp; </span></p> <p>&nbsp;</p> <p style="margin: 0in 0in 8pt;"><span style="font-family: Calibri; font-size: small;">Janet Yellen speech today should acknowledges how broken the<br /> bond market is and disconnected from their policy path or any semblance of<br /> normalization.&nbsp; She, too, will try to<br /> talk a good game. &nbsp;However, the market is<br /> so embedded with large traders with gargantuan balance sheets too large to<br /> reposition for higher rates without hurting their positions, the manipulation<br /> of rates will continue. </span></p> <p>&nbsp;</p> <p style="margin: 0in 0in 8pt;"><span style="font-family: Calibri; font-size: small;">To avoid a significant self-made financial crisis, Yellen<br /> needs to walk the walk as well. &nbsp;Yes, a<br /> 50 bp hike will stop this behavior. &nbsp;Also,<br /> bringing forward sales from their balance sheet, or let the balance sheet run<br /> off faster would end the manipulative behavior in the bond market that monetary<br /> policy has incubated.&nbsp; This would also be<br /> a savvy way to take advantage of these lower rates instead of getting front-run<br /> by these markets. &nbsp;The sooner the bond<br /> market starts to truly normalize, the less severe the market impact will be<br /> from the overvalued global bond market normalization process. &nbsp;So to avoid the same policy mistakes of the<br /> last tightening cycle and creating a financial and economic crisis, Yellen should<br /> be a little less predictable, knock out that perceived put option on higher<br /> rates and let increased volatility regulate the markets keeping positions<br /> smaller and extreme risk taking at bay.&nbsp; Today’s<br /> speech will be a step in the right direction. </span></p> <p>&nbsp;</p> <p style="margin: 0in 0in 8pt;"><span style="font-family: Calibri; font-size: small;">&nbsp;</span></p> <p>&nbsp;</p> <p style="margin: 0in 0in 8pt;"><span style="font-family: Calibri; font-size: small;">by Michael Carino, 6/27/17</span></p> <p>&nbsp;</p> <p style="margin: 0in 0in 8pt;"><span style="font-family: Calibri; font-size: small;">Michael Carino is the CEO of Greenwich Endeavors, a<br /> financial service firm, and has been a fund manager and owner for more than 20<br /> years. &nbsp;He has positions that benefit<br /> from a normalized bond market and higher yields. &nbsp;Do you?</span></p> <p>&nbsp;</p> <p style="margin: 0in 0in 8pt; line-height: normal;"><span style="font-size: 12.0pt; mso-ascii-font-family: Calibri; mso-fareast-font-family: &quot;Times New Roman&quot;; mso-hansi-font-family: Calibri; mso-bidi-font-family: &quot;Times New Roman&quot;; color: black;">&nbsp;</span></p> <p><strong>&nbsp;</strong><em>&nbsp;</em><span style="text-decoration: underline;">&nbsp;</span><span style="text-decoration: line-through;">&nbsp;</span></p> <div class="field field-type-filefield field-field-image-blog"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_blog" width="675" height="693" alt="" src="http://www.zerohedge.com/sites/default/files/images/user239916/imageroot/MJC_10.jpg?1498574142" /> </div> </div> </div> http://www.zerohedge.com/news/2017-06-27/janet-yellens-monetary-policy-just-eased-50-bps-and-she-can%E2%80%99t-be-happy-michael-carin#comments Banking Bond Bond Business Central bank Central Banks Economy fed Finance Fixed income market Interest rates Janet Yellen Monetary Policy Monetary policy Money Real interest rate Recession Systemic risk US Federal Reserve Volatility William Dudley Yield Curve Yield curve Tue, 27 Jun 2017 14:37:18 +0000 Greenwich Endeavors 598758 at http://www.zerohedge.com Trump "Increasingly Frustrated With China" Over North Korea, Trade: Reuters http://www.zerohedge.com/news/2017-06-27/trump-increasingly-frustrated-china-over-north-korea-trade-reuters <p>Two weeks after Trump's ominous "China "tried and failed" to contain North Korea tweet, the US president appears to be getting closer to that default condition in US-China relations which many had anticipated from day one: a not particularly cooperative one. Here's Reuters:</p> <ul> <li><strong>TRUMP IS INCREASINGLY FRUSTRATED WITH CHINA OVER NORTH KOREA, TRADE DIFFERENCES-SENIOR ADMINISTRATION OFFICIALS</strong></li> <li>TRUMP DROPPED BY MEETING LAST WEEK BETWEEN SENIOR CHINESE OFFICIAL AND WHITE HOUSE ADVISERS KUSHNER, MCMASTER - SENIOR ADMINISTRATION OFFICIAL</li> <li>TRUMP IS CONSIDERING TOUGHER STANCE ON TRADE WITH CHINA; STEEL TARIFFS ARE AMONG OPTIONS-SENIOR ADMINISTRATION OFFICIALS</li> </ul> <p>The report follows last night's news that the United States plans to place China on its global list of worst offenders in human trafficking and forced labor, a step that according to <a href="https://www.reuters.com/article/us-usa-china-trafficking-idUSKBN19H28P">Reuters </a>could aggravate tension with Beijing that has eased under President Donald Trump.</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>The reprimand of China, Washington's main rival in the Asia-Pacific region, would come despite Trump's budding relationship with Chinese counterpart Xi Jinping and the U.S. president’s efforts to coax Beijing into helping to rein in North Korea’s nuclear and missile programs. </p> <p>&nbsp;</p> <p>Secretary of State Rex Tillerson has decided to drop China to "Tier 3," the lowest grade, putting it alongside Iran, North Korea and Syria among others, said the sources, who have knowledge of the internal deliberations and spoke on condition of anonymity. </p> <p>&nbsp;</p> <p>The rating is expected to be announced on Tuesday in an annual report published by the State Department's Office to Monitor and Combat Trafficking in Persons. A State Department official declined to comment on the report's contents and said the department "does not discuss details of internal deliberations."</p> </blockquote> <p>Tier 3 rating can trigger sanctions limiting access to U.S. and international aid, but U.S. presidents frequently waive such action.</p> <p>While it was unclear what led Tillerson to downgrade China, last year's report criticized the communist government for not doing enough to curb "state-sponsored forced labor" and concluded it did not meet "minimum standards" for fighting trafficking – though it still said Beijing was making significant efforts.</p> <p>China has yet to respond to what may be a growing escalation in US-Chinese relations which started off on the right foot with Xi's visit to Mar a Lago but have since deteriorated, slowly at first.... </p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="300" height="168" alt="" src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/index.jpg?1498574130" /> </div> </div> </div> http://www.zerohedge.com/news/2017-06-27/trump-increasingly-frustrated-china-over-north-korea-trade-reuters#comments Asia-Pacific Business China China–United States relations default Department of State Donald Trump Donald Trump Draft:Timeline of the presidency of Donald Trump First 100 days of Donald Trump's presidency Iran North Korea Politics Reuters Rex Tillerson Rex Tillerson SENIOR ADMINISTRATION State Department United States White House White House Tue, 27 Jun 2017 14:36:37 +0000 Tyler Durden 598757 at http://www.zerohedge.com Conference Board Consumer 'Hope' Stumbles To 5-Month Lows http://www.zerohedge.com/news/2017-06-27/conference-board-consumer-hope-stumbles-5-month-lows <p>Following the drop in <a href="http://www.zerohedge.com/news/2017-06-16/republicans-crack-umich-confidence-slumps-lowest-trump-elected">UMich confidence preliminary print for June</a> (as Republican hope fell), <strong>The Conference Board&#39;s measure of confidence ticked up, handily beating expectations</strong>. The present situation index rose sharply but <strong>economic expectations tumbled to its lowest since January.</strong></p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/06/22/20170627_conf2.jpg"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/06/22/20170627_conf2_0.jpg" style="width: 600px; height: 313px;" /></a></p> <p>As Bloomberg notes, while consumers are growing weary about the political environment and their chances of obtaining some form of stimulus, conditions in the real economy like low gas prices, rising stock market valuations and a strong labor market remain major confidence boosters.</p> <p>But economic expectations slumped to Jan lows...</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/06/22/20170627_conf3.jpg"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/06/22/20170627_conf3_0.jpg" style="width: 600px; height: 306px;" /></a></p> <p><a href="http://www.gallup.com/poll/212831/americans-confidence-economy-remains-barely-positive.aspx?utm_source=alert&amp;utm_medium=email&amp;utm_content=morelink&amp;utm_campaign=syndication"><em>But Gallup notes that, </em></a>among its respondents, <strong>Americans&#39; confidence in the economy remains barely positive</strong>.</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/06/22/20170627_conf.jpg"><img height="258" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/06/22/20170627_conf_0.jpg" width="600" /></a></p> <p>From 2008 -- when Gallup began tracking economic confidence on a daily basis -- through most of 2016, Americans&#39; assessments of the economy were routinely negative, although they became less negative over time. However,<strong> last year&#39;s presidential election proved to be an inflection point for economic confidence.</strong></p> <p>Last week marked the 32nd straight week the index has been above zero, meaning that many Americans --<strong> Republicans above all -- continue to feel fundamentally different about the economy now than they did before the election. </strong>Still, economic confidence has ebbed and flowed throughout the first half of 2017, with the measure registering an eight-year high of +14 the week after Donald Trump was inaugurated as president and surpassing this in early March with a +16 reading.</p> <p><strong>But in subsequent months, confidence has declined -- largely due to worsening attitudes among Democrats.</strong> Since May, however, attitudes have largely stabilized, with weekly averages of the index remaining slightly positive.</p> <p>Worse still, Gallup notes that while the current conditions are holding positive, <strong>expectations for the future are notably negative</strong>...</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/06/22/20170627_conf1.jpg"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/06/22/20170627_conf1_0.jpg" style="width: 600px; height: 214px;" /></a></p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="960" height="490" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20170627_conf3.jpg?1498572476" /> </div> </div> </div> http://www.zerohedge.com/news/2017-06-27/conference-board-consumer-hope-stumbles-5-month-lows#comments Conference Board Conference Board Consumer confidence Donald Trump Economy Gallup Politics Rational expectations Recession Structure United States World Tue, 27 Jun 2017 14:08:24 +0000 Tyler Durden 598752 at http://www.zerohedge.com Coffee; Been cold of late, about to heat up? http://www.zerohedge.com/news/2017-06-27/coffee-been-cold-late-about-heat <p><img src="https://www.kimblechartingsolutions.com/wp-content/uploads/2017/06/iced-coffee-pic.jpg" title="Coffee has been anything but hot of late! Actually it has been pretty cold performance wise, as it has declined over 25% the past few months. Could this large decline become an opportunity? Could be, due to the pattern below. kimble Charting Solutions" width="250" style="background-position: 0px 0px, 10px 10px; background-size: 20px 20px; background-image: linear-gradient(45deg, #eeeeee 25%, transparent 25%, transparent 75%, #eeeeee 75%, #eeeeee 100%), linear-gradient(45deg, #eeeeee 25%, white 25%, white 75%, #eeeeee 75%, #eeeeee 100%); display: block; margin-left: auto; margin-right: auto;" /></p> <p>&nbsp;</p> <p><span style="color: #303030; font-family: &quot;Open Sans&quot;, Arial, sans-serif; font-size: 14px;">Coffee has been anything but hot of late! Actually it has been pretty cold performance wise, as it has declined over 25% the past few months. Could this large decline become an opportunity? Could be, due to the pattern below.</span></p> <p>&nbsp;</p> <p><a href="https://www.kimblechartingsolutions.com/wp-content/uploads/2017/06/jo-testing-support-at-the-apex-of-bullish-falling-wedge-june-27.jpg" target="_blank" title="Coffee; Been cold of late, about to heat up?, kimble charting solutions"><img src="https://www.kimblechartingsolutions.com/wp-content/uploads/2017/06/jo-testing-support-at-the-apex-of-bullish-falling-wedge-june-27.jpg" alt="Coffee ETF (JO) Weekly " title="Coffee; Been cold of late, about to heat up?, kimble charting solutions" width="1000" style="user-select: none; background-position: 0px 0px, 10px 10px; background-size: 20px 20px; background-image: linear-gradient(45deg, #eeeeee 25%, transparent 25%, transparent 75%, #eeeeee 75%, #eeeeee 100%), linear-gradient(45deg, #eeeeee 25%, white 25%, white 75%, #eeeeee 75%, #eeeeee 100%); display: block; margin-left: auto; margin-right: auto;" /></a></p> <p style="box-sizing: border-box; margin-top: 0px; margin-bottom: 0px; padding-bottom: 1em; outline: 0px; background-image: initial; background-position: initial; background-size: initial; background-repeat: initial; background-attachment: initial; background-origin: initial; background-clip: initial; font-size: 14px; color: #303030; font-family: &quot;Open Sans&quot;, Arial, sans-serif; text-align: center;"><span style="box-sizing: border-box; outline: 0px; background: transparent; color: #0000ff;"><strong style="box-sizing: border-box; outline: 0px; background: transparent;">CLICK ON CHART TO ENLARGE</strong></span></p> <p style="box-sizing: border-box; margin-top: 0px; margin-bottom: 0px; padding-bottom: 1em; outline: 0px; background-image: initial; background-position: initial; background-size: initial; background-repeat: initial; background-attachment: initial; background-origin: initial; background-clip: initial; font-size: 14px; color: #303030; font-family: &quot;Open Sans&quot;, Arial, sans-serif;">The large decline in Coffee futures this year has impacted&nbsp;<a href="https://finance.yahoo.com/quote/JO?p=JO" style="box-sizing: border-box; background: transparent; color: #2ea3f2; outline: 0px;"><strong style="box-sizing: border-box; outline: 0px; background: transparent;">Coffee ETF (JO)</strong></a>, as it to has fallen hard so far this year. The large decline saw it test dual support last week, where it could have created a reversal pattern (bullish wick) at (1).</p> <p style="box-sizing: border-box; margin-top: 0px; margin-bottom: 0px; padding-bottom: 1em; outline: 0px; background-image: initial; background-position: initial; background-size: initial; background-repeat: initial; background-attachment: initial; background-origin: initial; background-clip: initial; font-size: 14px; color: #303030; font-family: &quot;Open Sans&quot;, Arial, sans-serif;">The trend remains down for sure. If JO would happen to breakout above falling resistance at (2), it would attract buyers, as bullish sentiment for Coffee stands at just 23%. Coffee traders have also established a crowded trade, making a huge bet that Coffee will head lower. Historically, when traders established this position in Coffee, it was closer to a low than a high.</p> <p>&nbsp;</p> <p><span style="font-family: inherit; font-size: inherit; font-style: inherit; font-variant: inherit; font-weight: inherit; box-sizing: border-box; font-stretch: inherit; line-height: inherit; color: #0000ff;"><strong style="box-sizing: border-box; font-style: inherit; font-variant: inherit; font-stretch: inherit; font-size: inherit; line-height: inherit; font-family: inherit;">This information is coming t</strong></span><strong style="font-family: inherit; font-style: inherit; font-variant: inherit; box-sizing: border-box; font-stretch: inherit; font-size: 13.008px; line-height: inherit; color: #0000ff;">o you from Kimble Charting Solutions. &nbsp;Home of the Power of the Pattern where we provide Concise, Timely and Actionable chart pattern analysis and commentary so in very little time you know the pattern at hand and action to take&nbsp;</strong></p> <p style="box-sizing: border-box; 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margin: 0in 0in 0.0001pt; font-variant-numeric: inherit; font-stretch: inherit; font-size: 13px; line-height: 1.3; font-family: lucida_granderegular, Verdana, sans-serif;">&nbsp;</p> <p style="box-sizing: border-box; margin: 0in 0in 0.0001pt; font-variant-numeric: inherit; font-stretch: inherit; font-size: 13px; line-height: 1.3; font-family: lucida_granderegular, Verdana, sans-serif;">&nbsp;</p> <p style="box-sizing: border-box; margin: 0in 0in 0.0001pt; font-variant-numeric: inherit; font-stretch: inherit; font-size: 13px; line-height: 1.3; font-family: lucida_granderegular, Verdana, sans-serif;"><span style="box-sizing: border-box; font-style: inherit; font-variant: inherit; font-weight: inherit; font-stretch: inherit; font-size: inherit; line-height: inherit; font-family: inherit; color: #303030;"><strong style="box-sizing: border-box; font-style: inherit; font-variant: inherit; font-stretch: inherit; font-size: inherit; line-height: inherit; font-family: inherit;"><br /></strong></span></p> <div class="field field-type-filefield field-field-image-blog"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_blog" width="1292" height="675" alt="" src="http://www.zerohedge.com/sites/default/files/images/user182769/imageroot/jo-testing-support-at-the-apex-of-bullish-falling-wedge-june-27.jpg?1498572196" /> </div> </div> </div> http://www.zerohedge.com/news/2017-06-27/coffee-been-cold-late-about-heat#comments Arab culture Business Coffee Crops Economy Finance Money Technical analysis Tue, 27 Jun 2017 14:03:30 +0000 kimblecharting 598751 at http://www.zerohedge.com Hong Kong Small Caps Crash Amid Marketwide Margin Call: "It's A Domino Effect" http://www.zerohedge.com/news/2017-06-27/its-domino-effect-hong-kong-microcaps-crash-amid-marketwide-margin-call <p>A few weeks ago, we <a href="http://www.zerohedge.com/news/2017-06-09/chinese-companies-ask-employees-buy-their-stock-promise-cover-losses">reported that in a bizarre development </a>- and the latest in a long series of red flags involving Chinese and HK stocks - various Chinese small and micro cap companies had asked <em><strong>employees </strong></em>to buy their stock while promising to cover losses" amid rising margin call pressures as the underlying stocks had been drifting lower. As we also noted, China has a broader issue with collateral that could endanger the health of its financial system, such as fraudulent or "ghost" collateral, where pledged products either don't exist or are already sold or pledged to multiple lenders. </p> <p>This in turn led BofA strategist David Cui warned that a potential <strong>"vicious selling circle" could lead to a replay of China's mid-2015 market crash. "As the 2015 experience shows, with high leverage, a vicious selling circle can quickly develop," </strong>he said, noting a "moderate" risk of broad-based financial instability. To which we concluded that "at that point either Beijing will have to step in with another bailout, or scenes such as this one which emerged during the 2015 market rout, will become the norm once again."</p> <p>Less than three weeks later we got a vivid example of just how dire the impact of a coordinated margin calls on Chinese markets could be, when overnight dozens of Hong Kong microcap stocks plunged amid what started as a rumor that the local exchange will force all "zombie companies"to delist (since denied)...&nbsp;</p> <blockquote class="twitter-tweet"><p dir="ltr" lang="en">Dozens of HKEx penny stocks plunged 40%~90% today amid rumor HKEx will force all "zombie stocks" to delist. <br />HKEx denies the rumor!</p> <p>— Simon Ting (@simonting) <a href="https://twitter.com/simonting/status/879582064495869952">June 27, 2017</a></p></blockquote> <script src="//platform.twitter.com/widgets.js"></script><p>... but not before triggering banks to promptly demand their margin, which in turn led to a sudden plunge in over a dozen names on Tuesday as 'traders pointing to links between some of the companies and a brokerage that’s under regulatory investigation" <a href="https://www.bloomberg.com/news/articles/2017-06-27/hong-kong-small-cap-collapse-wipes-out-5-1-billion-this-morning">according to Bloomberg</a>.</p> <p>In total, seventeen firms tumbled by more than 40% at the close, losing a combined $6.1 billion in market value. Among the names plunging were China Jicheng Holdings, an umbrella maker, and GreaterChina Professional Services which sank more 90% . </p> <p><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/06/25/jicheng_0.jpg" width="500" height="282" /></p> <p>Quoted by Bloomberg, Francis Lun, the CEO of HK's Geo Securities said “we’re seeing a domino effect; all the companies in the same network got cut. <strong>These shares are owned by the same group of people so they must be experiencing a liquidity crunch and they don’t have the money to support the share prices,”</strong> he said.</p> <p>In other words, a market-wide margin call, which led to a self-reinforcing avalanche of selling, and as&nbsp; </p> <p>There were other red flags which investors conveiently ignored as long as everything was going up. <a href="https://www.bloomberg.com/news/articles/2017-06-27/hong-kong-small-cap-collapse-wipes-out-5-1-billion-this-morning">Here's Bloomberg</a></p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><strong>The stocks that saw large price drops on Tuesday tended to have characteristics that can be conducive to extreme volatility and to market misconduct: multiple relationships between different companies and listed brokerage firms, high shareholding concentrations, thin turnover and small public floats,</strong> Ernest Kong, a spokesman at the Securities &amp; Futures Commission, said in an emailed statement. The regulator won’t comment on whether it has been or will be pursuing investigations into specific individuals or related companies, he said.</p> </blockquote> <p>The selloff, which sent Hong Kong's Growth Enterprise Market, or S&amp;P/HKEX GEM Index crashing by 10%, the most since 2015, has reinforced concerns about risks in the world’s fourth-largest equity market after a series of spectacular plunges. While Hong Kong’s benchmark index is among the best performers this year, declines in companies such as China Huishan Dairy Holdings Co., which in March plunged 85%&nbsp; after a Muddy Waters research report, have blown up more than one investor.</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/06/25/HK%20GEMs.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/06/25/HK%20GEMs_0.jpg" width="500" height="282" /></a></p> <p>Meanwhile, despite the crash in HK's small capps, the broader market remained resilient to the declines on Tuesday, with the Hang Seng Index losing only 0.1% and the Hang Seng Composite Small Cap Index sliding 0.4%.</p> <p>To be sure, anyone seeking an explanation for what happened would be disappointed: Hong Kong Exchanges &amp; Clearing Ltd. said it wasn’t in a position to explain the share price declines.</p> <p>However, as noted above, the explanation was simple: a market-wide margin call which promptly made all the recent buyers into aggressive lilquidators: </p> <p><strong>“Obviously there’s been some margin calls and forced liquidation of shares among these companies,” </strong>said Hao Hong, Hong Kong based strategist with Bocom International.</p> <p>Obviously. </p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="600" height="338" alt="" src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/HK%20GEMs.jpg?1498570775" /> </div> </div> </div> http://www.zerohedge.com/news/2017-06-27/its-domino-effect-hong-kong-microcaps-crash-amid-marketwide-margin-call#comments Business China Economic history of the Netherlands Economy Finance GEM Hang Seng 40 Hang Seng Index Hong Kong Hong Kong Exchanges and Clearing Market Crash Securities & Futures Commission Short Stock market Stock market crash Volatility Tue, 27 Jun 2017 13:39:37 +0000 Tyler Durden 598750 at http://www.zerohedge.com Tesla Stock Slips After German Watchdog Warns Self-Driving Cars Unsafe http://www.zerohedge.com/news/2017-06-27/tesla-stock-slips-after-german-watchdog-warns-self-driving-cars-unsafe <p>Tesla stock price is extending its declines from yesterday&#39;s tumble after reports that <strong>Tesla&rsquo;s first generation self-driving cars may not be safe on public roads</strong>, the German&nbsp;central vehicle inspection agency said, according to a <a href="https://global.handelsblatt.com/companies-markets/tesla-cars-unsafe-says-german-watchdog-787511">report in Handelsblatt</a>.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><strong>The 4,000 Tesla Model S vehicles in Germany equipped with the original Autopilot system &ldquo;are not built and equipped in such a way that their normal operation does not harm or more than unavoidably endanger anyone,&rdquo; </strong>said the report by the FSD, or Fahrzeugsystemdaten. The Dresden-based company is tasked by German vehicle inspection organizations to improve the precision of inspections. Its head, Jürgen Bönninger, is essentially the bad conscience of all automakers.</p> <p>&nbsp;</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/06/22/20170627_tsla1.jpg"><img height="354" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/06/22/20170627_tsla1.jpg" width="600" /></a></p> <p>&nbsp;</p> <p>Mr. Bönninger was unwilling to comment on his <strong>40-page report, which he said was not intended for public consumption.</strong> But Germany&rsquo;s Federal Motor Transport Authority, or KBA, which has seen the report, has had concerns about the autopilot system for some time.</p> </blockquote> <p>The reaction for now is modest, testing yesterday&#39;s lows...</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/06/22/20170627_tsla.jpg"><img height="395" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/06/22/20170627_tsla_0.jpg" width="600" /></a></p> <p>&nbsp;</p> <p><strong>&ldquo;The Federal Motor Transport Authority continues to maintain that the &lsquo;Autopilot&rsquo; used by Tesla is purely a driver assistance system,&rdquo; </strong>the transport ministry said on its behalf.</p> <p>In October, the KBA sent a letter to all 4,237 Tesla owners warning them of this fact and that <strong>Autopilot should only &ldquo;be operated with the driver&rsquo;s constant attention.&rdquo;</strong></p> <p>When contacted, <strong>Tesla stressed that Autopilot is a driver assistance system</strong> and that it has received the KBA&rsquo;s official permission to use the term.</p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="582" height="343" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20170627_tsla1.jpg?1498569375" /> </div> </div> </div> http://www.zerohedge.com/news/2017-06-27/tesla-stock-slips-after-german-watchdog-warns-self-driving-cars-unsafe#comments Advanced driver assistance systems Advanced driver-assistance systems Automation Automotive industry Autonomous car Disaster Federal Motor Transport Authority Germany Germany’s Federal Motor Transport Authority Hatchbacks Nikola Tesla Private transport Tesla Autopilot Tesla Model S Tesla, Inc. Transport Tue, 27 Jun 2017 13:19:22 +0000 Tyler Durden 598745 at http://www.zerohedge.com