en "The System Itself Is At Risk" Bill Gross Warns, Shorts Credit As "Day Of Reckoning Is Coming" <p>We were surprised to hear none other than legendary bond investor Bill Gross, who made billions going long bonds, <a href="">admit to Bloomberg's Erik Schatzker last night </a>that he is starting to short credit, "<strong>a position that he said runs contrary to his instincts and training as an investor.</strong>"</p> <p>The reason why Gross, who called the Bund blow up last year with uncanny precision, is turning bearish on an asset classes that Mario Draghi is directly supporting - and as such Gross is fighting at least on Central Bank - is peculiar: he thinks the time of central bank dominance is almost over. Gross, who manages the $1.3 billion Janus Global Unconstrained Bond Fund, said he is moving to sell credit risk and insurance on market volatility rather than buying long-term debt, <strong>because he believes a day of reckoning will come when central banks will no longer be able to prop up asset prices and investors will withdraw from markets.</strong></p> <p>"It’s really hard to change your psychological makeup and to be a hedge manager that is comfortable with being short,” he said in an interview with Bloomberg’s Erik Schatzker. <strong>“I’m working on it, because I’m an investor that ultimately does believe in the system, but believes that the system itself is at risk</strong>."</p> <p>The underlying thesis behind Gross' bearish take is simple: stimulus from central banks worldwide has artificially pushed up values of stocks and credit, which has made Gross cautious on such assets, he said.</p> <p>Eliminating credit as an investment means "<strong>not buying stocks, not buying high-yield bonds." </strong>Gross said. "It means going the other way, which comes at a price."</p> <p>Gross' shift in position in odd because Janus' unconstrained fund (up 2.6% YTD) which Gross co-manages with Kumar Palghat, invests in fixed-income and derivative instruments. It already has a rather low effective duration of 1.13 years, a short-term position that aims to reduce exposure to losses if rates rise. If Gross is indeed going net short, the duration will drop even further.&nbsp; </p> <p>It’s becoming increasingly difficult for money managers to justify their fees or their jobs, Gross said. "I know that my investors want three, four, or five percent, or else they can keep it in the bank or stuff it in their mattress." he said. </p> <p>Which perhaps explains Gross' transition to a Michael Burry-style investing mentality: betting on the "fat tail" event. </p> <p>Gross also had some <a href="">comments on Japan</a>, and the entire central bank endgame. </p> <p>He said that the only way for Japan to eventually cut its debt burden is for the central bank to acquire it and forgo repayment, a scenario that may play out in similar ways in other countries. </p> <p><strong>"I think that’s where they’re headed. I’m not endorsing that. I think at some point, Japan will basically buy up all its debt and the central bank will forgive the treasury and try to move forward with that. I see no other way out for Japan.</strong>”</p> <p><strong>“Ultimately, they could own all the market,” </strong>he added during his <a href="">Bloomberg interview</a>. "At that point they could say to the fiscal side, ‘Olly olly oxen free. You don’t have to pay us back. Or we’ll extend your debt to 50 years with a zero percent coupon and at that point we’ll essentially eliminate the entire obligation.’"</p> <p>Gross said such a move would have dramatic and damaging consequences for Japan’s currency, savings rate and private sector. Japan has unique demographic factors that exacerbate its economic dilemma, but other nations will face similar choices, he said. </p> <p>He believes it is also the endgame. </p> <p>"Japan’s a pretty good picture for the rest of the world, maybe five or 10 years ahead. <strong>I have a sense that that’s the route central banks will pursue. They’ll keep on buying debt, keep interest rates low and then ultimately the treasury doesn’t owe them anything.</strong>”</p> <p>What should central banks do? </p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>Central banks, he said, need to start raising rates to restore the right incentives for investors. Gross said the Federal Reserve needs a leader similar to Paul Volcker, who raised interest rates in the 1980s despite popular opposition. </p> <p>&nbsp;</p> <p>“We need another Volcker,” Gross said.</p> </blockquote> <p>Unfortunately that won't happen. </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="2000" height="1334" alt="" src="" /> </div> </div> </div> Bill Gross Bond Central Banks Federal Reserve Japan None Paul Volcker Savings Rate Volatility Thu, 26 May 2016 13:17:14 +0000 Tyler Durden 561936 at Sudden Dollar Dump Sparks Bond, Bullion Bid <p>It appears the weakness underlying the durable goods data is scaring the hawkish bid out of markets. 2Y yields are tumbling, the USD index is dropping, and gold is bid...</p> <p>&nbsp;</p> <p><a href=""><img src="" width="600" height="101" /></a></p> Bond Thu, 26 May 2016 13:11:51 +0000 Tyler Durden 561934 at Smart Traders Who Realize This Pattern Could Make a Killing <p><span style="font-size:14px;">The markets are tracking the same pattern that played out in 2015.</span></p> <p><span style="font-size:14px;">Most market action (more than 80%) today is driven by computer algorithms. These programs look for an asset class that is moving, and then buy based on the momentum.</span></p> <p><span style="font-size:14px;">From March through May, the moving asset class is Oil, which historically tends to rally during this period. In 2015, Oil bottomed in March and rallied hard into June.</span></p> <p><span style="font-size:14px;"><img alt="" src="" style="width: 460px; height: 284px;" /></span></p> <p><span style="font-size:14px;">This year, the same pattern played out. However, the pattern hit a month early as traders and computers tried to front-run each other. Oil bottomed in February and has risen to $50 per barrel.</span></p> <p><span style="font-size:14px;"><img alt="" src="" style="width: 460px; height: 284px;" /></span></p> <p><span style="font-size:14px;">Anyone who is buying into this rally in the belief that it represents the start of a new bull market needs to consider what happened in 2015 when the seasonal trend ended: <strong style="font-size: 10pt;"><u>Oil crashed, pulling stock down with it.</u></strong></span></p> <p><span style="font-size:14px;"><img alt="" src="" style="width: 460px; height: 284px;" /></span></p> <p><span style="font-size:14px;">We firmly believe the markets are prepring for another Crash. Only unlike the one that hit in August 2015, this one will see stocks dropping over 20%.</span></p> <p><span style="font-size:14px;"><span style="font-family: 'Lucida Grande', Verdana, sans-serif;">On that note, we are already preparing our clients for this with a 21-page investment report titled&nbsp;</span><strong style="font-family: 'Lucida Grande', Verdana, sans-serif; font-size: 10pt;">Stock Market Crash Survival Guide</strong><span style="font-family: 'Lucida Grande', Verdana, sans-serif;">.</span></span></p> <p style="font-family: 'Lucida Grande', Verdana, sans-serif;"><span style="font-size:14px;">In it, we outline precisely how the crash will unfold as well as which investments will perform best during a stock market crash.</span></p> <p style="font-family: 'Lucida Grande', Verdana, sans-serif;"><span style="font-size:14px;">We are giving away just 1,000 copies for FREE to the public.</span></p> <p style="font-family: 'Lucida Grande', Verdana, sans-serif;"><span style="font-size:14px;">To pick up yours, swing by:</span></p> <p style="font-family: 'Lucida Grande', Verdana, sans-serif;"><span style="font-size:14px;"><strong><a href=""></a></strong></span></p> <p style="font-family: 'Lucida Grande', Verdana, sans-serif;"><span style="font-size:14px;">Best Regards</span></p> <p style="font-family: 'Lucida Grande', Verdana, sans-serif;"><span style="font-size:14px;">Graham Summers</span></p> <p style="font-family: 'Lucida Grande', Verdana, sans-serif;"><span style="font-size:14px;">Chief Market Strategist</span></p> <p style="font-family: 'Lucida Grande', Verdana, sans-serif;"><span style="font-size:14px;">Phoenix Capital Research</span></p> Market Crash Thu, 26 May 2016 13:05:35 +0000 Phoenix Capital Research 561933 at The Anger Of The Unprivileged Is Rising Globally <p><a href=""><em>Submitted by Charles Hugh-Smith of OfTwoMinds blog,</em></a></p> <p><em>Privilege serves the same purpose--benefiting the few at the expense of the many--regardless of the system&#39;s ideological labels. </em></p> <p><strong>The righteous disgust with the status quo that spawned the broad-based campaigns of Bernie Sanders and Donald Trump is not unique to the U.S.</strong> Globally, those disenfranchised by the status quo--the unprivileged, or in <a href="" target="resource">Peggy Noonan&#39;s phrase, <em>the unprotected</em></a>-- are starting to express their discontent in the streets, in social media and in elections.</p> <p>Why are people around the world angry? It&#39;s obvious to everyone in the unprivileged classes and a mystery to the &quot;we&#39;re doing just fine here, what&#39;s your problem?&quot; privileged classes: <strong>The system is rigged to benefit the protected few and marginalize the unprotected many.</strong></p> <p><strong>The problems are not just political; they are structural</strong>. As I outline in my new book, <a href=";camp=1789&amp;creative=9325&amp;creativeASIN=B01ELXQZGE&amp;linkCode=as2&amp;tag=charleshughsm-20&amp;linkId=33DAOPEVGBNGBS37" target="resource">Why Our Status Quo Failed and Is Beyond Reform</a>, there are two structural engines of disorder at the heart of the system:</p> <p>1. Automation, software and the forces of globalization are disrupting jobs and wages everywhere.</p> <p>2. Centralized hierarchies and the forces of financialization have extended the power of privilege globally so <em>the few are benefiting at the expense of the many</em>, as revealed in this chart of global wealth:</p> <p><img align="middle" border="0" src="" /></p> <p><strong>The growing concentration of wealth and power in the privileged elites is evidenced by the fact that 8% of the world&#39;s populace owns 85% of its wealth.</strong> What is driving this increasing concentration of wealth and power? In a word: <strong>Privilege</strong>.</p> <p><strong>To understand rising wealth/income disparity and the increasing concentration of wealth, we must first understand the dual nature of privilege.</strong> Just as power comes in two flavors--<em>hard power</em> (military power) and <em>soft power</em> (exporting cultural wares and values)--so does privilege.</p> <p><strong><em>Hard-wired privileges</em> are those that grant the holder of an office or position in the hierarchy specific rights to accumulate income, wealth and political power</strong> that are not available to the unprivileged. Officials in corrupt countries gain the right to collect fees from citizens as a direct result of their official position. Financiers in the U.S. have access to unlimited credit at low rates (<em>free money for financiers</em>) as a direct result of their position atop the financial pyramid.</p> <p><strong><em>Field-effect (&quot;soft&quot;) privileges</em> are defined by <em>class and access</em> rather than by the hard-wired authority of office or position in a formal hierarchy.</strong> Field-effect privileges include: enhanced access to Ivy League higher education granted to children of alumni and major donors; membership in exclusive clubs; access to &quot;old boy&quot; networks of alumni and partners, and so on.</p> <p><strong>Field-effect (&quot;soft&quot;) privileges are one primary reason why the income of the top 20% has risen from 40% of total U.S. income to 51% in the past two decades.</strong> In a rapidly financializing, globalized economy, those with access to higher education, class connections and abundant credit have built-in advantages over those without <em>all three advantages, which are self-reinforcing.</em></p> <p>(I use the term <em>field-effect</em> to suggest that these privileges act like electrical fields, affecting all within their range, often without the privileged even being aware of their privileges. Hence the upper-middle penchant for overlooking all their class advantages and attributing their success to hard work. Well, yes, but that&#39;s not the entire story: we must also measure the often-subtle benefits of <em>field-effect privileges</em>.)</p> <p>Over time, these privileges accrue substantial income and wealth: the 10% difference between 40% and 50% of total household income is $1.4 trillion per year. In the past decade, that means the top 20% has gained about $12 trillion more in income than it would have if its share of total household income had remained at 40%.</p> <p>(Income data source: <a href="" target="resource">Income and Poverty in the United States: 2014</a>)</p> <p>Having an Ivy League (or equivalent top-tier public university) diploma is a plus, but it doesn&#39;t provide a wealth of self-reinforcing privileges unless it is combined with upper-class connections and networks and easy access to credit (to scoop up productive assets on the cheap). Together, these field-effect privileges create synergies that concentrate wealth and power.</p> <p><strong>Interestingly, privilege serves the same purpose--benefiting the few at the expense of the many--regardless of the system&#39;s ideological labels.</strong> Socialist, Communist and free-market elites loot their populaces and national wealth with equal gusto. Those who <em>came to do good and stayed to do well</em> first accumulate privileges, which they then leverage into wealth and power.</p> <p>The grievances of Chinese workers robbed of their wages, Greek small-business owners burdened by ever-rising taxes, downsized corporate warriors in the U.S., etc. may appear to be different, but beneath the surface <strong>these grievances all arise from one source: unearned privileges that benefit the few at the expense of the many.</strong></p> <p>The only way to eliminate social and economic injustice is to eliminate privilege, which is the heart of my book <a href=";camp=1789&amp;creative=9325&amp;creativeASIN=B0178MQI1M&amp;linkCode=as2&amp;tag=charleshughsm-20&amp;linkId=CGXPIKGVST4OBTXU" rel="nofollow" target="resource">A Radically Beneficial World</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="249" height="135" alt="" src="" /> </div> </div> </div> Bernie Sanders Donald Trump ETC Free Money Thu, 26 May 2016 13:00:37 +0000 Tyler Durden 561932 at Core Durable Goods Orders Slump As Inventories Decline For 4th Straight Month <p><strong>Core Durable Goods Orders tumbled 0.8% MoM and 6.7% YoY - down 15 of the last 18 months</strong>. However, following drastic revisions across the entire time series and thanks to a surge in <strong>military spending (+3.7%)</strong> and <strong>non-defense aircraft (+64.9%</strong> - bringing back memories of Boeing's aberration from a year or two back) the headline Durable Goods print rose 3.4% MoM. More worrying for GDP enthusiasts is the <strong>0.2% decline in durable goods inventories in April for the 4th straight month</strong>.</p> <p>Not a pretty picture under the hood....</p> <p><a href=""><img src="" width="600" height="313" /></a></p> <p>&nbsp;</p> <p>Non-Defense Aircraft New Orders spiked 64.9% - but in context, it's not so impressive...</p> <p><a href=""><img src="" width="600" height="296" /></a></p> <p>&nbsp;</p> <p>Charts: Bloomberg</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="963" height="503" alt="" src="" /> </div> </div> </div> Thu, 26 May 2016 12:44:48 +0000 Tyler Durden 561931 at Gartman Slammed By Gold: "We Have Had A Terrible Run This Past Week" <p>Gartman's performance continues to surprise: even after a day <a href="">when he managed to flip-flop </a>just in time to catch the market's general direction as he did yesterday when he warned shorts to "run for cover", and when he should - at least on paper - make a profit, he continues to lose. The culprit this time? Gold.</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>For our positions here at TGL… <strong>and we have had a terrible run this past week given that our largest position is and has been and shall continue to be gold and further given that we came into the week short of equities on balance and had to turn our trading ship around amidst this massive, violent rally that did indeed catch us off guard… </strong>we are up a scant 1.0% for the year-to-date and we ended the day yesterday net long of equities as we are long of an individual high tech equity closely associated with our alma mater, NC State University, and as we are long of the largest manufacturer of steel here in the US, while we are somewhat hedged with positions in the derivatives markets, leaving us net long of equities on balance and rather aggressively so. Of course, we have our long position in gold predicated in EUR and Yen denominated terms, but we have never considered that position to be an equity trade; <strong>it is a commodity trade of course, but it has rather obviously weighed heavily upon us this week</strong>.</p> </blockquote> <p>So perhaps it is time for Gartman to sell and go short his "commodity trade" then? Many gold bulls would be delighted...</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="181" height="183" alt="" src="" /> </div> </div> </div> Yen Thu, 26 May 2016 12:25:04 +0000 Tyler Durden 561930 at WTI Crude Tops $50 For First Time Since October Amid Supply Disruptions <p>WTI and Brent Crude oil prices have both <strong>broken above $50 for the first time since October 2015 this morning - almost doubling off its Feb 11th 26.05 lows</strong>. The immediate catalyst appears to be a combination of inventory drawdowns in US crude, continud US production cuts, and further <a href="">supply disruptions (Nigeria specifically)</a>, none of which scream demand or growth is going to make a dent in the glut.</p> <p>July WTI tops $50...</p> <p><a href=""><img height="413" src="" width="600" /></a></p> <p>&nbsp;</p> <p>&ldquo;The immediate driver is a good draw on U.S. crude stockpiles, helping to nudge the price up a bit further,&rdquo; says Ric Spooner, chief analyst at CMC Markets in Sydney.<em><strong> &ldquo;The market hasn&rsquo;t had any bad news to knock it off its perch but the price is likely to struggle if it gets into the $50s. There is still quite a bit of inventory around&rdquo;</strong></em></p> <p>&nbsp;</p> <p>With July WTI back at its highest since 11/5/15...</p> <p><a href=""><img src="" style="width: 600px; height: 280px;" /></a></p> <p>As Bloomnerg notes, other factors seen driving prices higher include:</p> <ul> <li>Canada wildfires said to cut 1m b/d or more of oil sands output; output still returning</li> <li>Nigeria oil output slumps to 20-yr low amid series of attacks</li> <li>Venezuela has difficulties maintaining output amid power cuts, restriction of field services and theft</li> <li>U.S. active oil rig count shrinks to least since Oct. 2009</li> <li>IEA raises 2016 world oil demand fcast by 100k b/d to 95.9m b/d, non-OPEC supply to drop 800k b/d to 56.8m; &ldquo;global supply surplus of oil will shrink dramatically later this year&rdquo;</li> </ul> <p>But we note that while everyone celebrates the recent rally, the curve has actually flattened notably since Nov 2015...</p> <p><a href=""><img height="327" src="" width="600" /></a></p> <p>&nbsp;</p> <p>And we are getting an awful case of deja vu again...</p> <p><a href=""><img alt="" src="" style="width: 600px; height: 312px;" /></a></p> <p>&nbsp;</p> <p><em>Charts: Bloomberg</em></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="1501" height="1033" alt="" src="" /> </div> </div> </div> B+ Crude Crude Oil None Thu, 26 May 2016 12:13:02 +0000 Tyler Durden 561929 at Chevron Facility Goes Offline In Nigeria Following Tweeted Attack By Mysterious Militant Group <p>Recently we <a href="">presented a profile </a>of the latest scourge to haunt Africa's former oil producing powerhouse Nigeria, namely the Niger Delta Avengers, who not only maintained a regularly updated blog following the February launch of their Godaddy-hosted website which even includes a Contact Us section... </p> <p><a href=""><img src="" width="600" height="380" /></a></p> <p>&nbsp;</p> <p>... but are perhaps the most social media savvy "freedom fighting" organization in the world today, with a twitter account that constantly updated on the group's ongoing activities. In fact, just yesterday the NDA may have been the first such group to pre-announce a terrorist act before any of the major media outlets caught it.</p> <blockquote class="twitter-tweet"><p dir="ltr" lang="en">We Warned <a href="">#Chevron</a> but they didn't Listen. <a href="">@NDAvengers</a> just blow up the Escravos tank farm Main Electricity Feed PipeLine.</p> <p>— Niger Delta Avengers (@NDAvengers) <a href="">May 25, 2016</a></p></blockquote> <script src="//"></script><p>It wasn't a joke. </p> <p>As Reuters reported this morning, <a href="">Chevron's onshore activities </a>in Nigeria's Niger Delta have been shut down by a militant attack at its Escravos terminal, the company confirmed on Thursday. </p> <p>As Reuters observes, the Niger Delta Avengers, which has told oil firms to leave the Delta before the end of May, said late on Wednesday it had blown up the facility's mains electricity feed. </p> <p>"It is a crude line which means all activities in Chevron are grounded," the source told Reuters, without elaborating. There was no immediate official confirmation from Chevron.</p> <p>Zebo Austin, who lives nearby, told Reuters: "We heard a loud blast at the Abiteye to Escravos crude pipeline which was blown up last night by yet-to-be identified militant group."</p> <p>The Avengers and other militants, who say they are fighting for a greater share of oil profits, an end to pollution and independence for the region, have intensified attacks in recent months, pushing oil output to its lowest in more than 20 years and compounding the problems faced by Africa's largest economy.</p> <p>Abuja has responded by moving in army reinforcements but British Foreign Minister Philip Hammond said this month President Muhammadu Buhari needed to deal with the root causes of the conflict.</p> <p>Crude oil sales from the Delta account for 70 percent of national income but residents in the area, some of whom sympathize with the militants, have long complained of poverty. Buhari has extended an amnesty deal signed with militants in 2009 that stepped up funding for the region. But he has cut funding for the amnesty program and canceled contracts with former militants to protect the pipelines they used to attack.</p> <p>Perhaps as a result of this tweeted attack, the oil grind higher continues this morning pushing both benchmark contracts above $50, since this latest attack means even more Nigerian oil output will be halted temporarily until the government finally manages to rein in this still mysterious organization with unknown funding. </p> Crude Crude Oil Reuters Twitter Twitter Thu, 26 May 2016 12:07:19 +0000 Tyler Durden 561927 at This Is What Would Make Jeff Gundlach Bullish <p>In his latest market commentary, presented by <a href="">Reuters on Tuesday night</a>, Gundlach remained skeptical on the stock market. Specifically, he said that the rally in U.S. stocks, which began on Monday, feels like a short squeeze and characterized U.S. stocks as "dead money." </p> <p><img src="" width="508" height="338" /></p> <p>He also mocked the return of the rate hikes are good fabulation, which has reemerged in recent days following the Fed's hawkish shift, and which is a carbon copy of what happened late last year when the Fed's first rate hike was also spun as positive: "I feel like we are back in December again, where everyone thinks that there is a super secret that some Fed officials have this knowledge that the economy is really good."</p> <p>But back to the market, which the DoubleLine <a href="">manager said an interview with MarketWatch </a>on Wednesday that he’s not ready to endorse, even as the S&amp;P 500 index has climbed 1.9% over the past week. </p> <p>So is there anything that would make a gloomy Gundlach bullish? As it turns out the answer is yes, but it is a big bogey. </p> <p>As MarketWatch quotes, <strong>Gundlach needs to see a truly breakout level for the S&amp;P 500 to get excited about this market. </strong>The DoubleLine chief executive said a climb above 2,200 for the S&amp;P 500 would be a bullish sign. Then again, the S&amp;P 500 has never hit 2,200, with an all time high of 2,131 set on May 21, 2015.</p> <p>“The market has been going sideways for 18 months, and when it breaks, either up or down, it should be a large move. <strong>So let the market prove itself. If it breaks to the upside, which I define as accelerating above 2,200, it is a good, low-risk, ‘go with’ buy." </strong>Aka, chase the momentum in either direction. In a market as broken as this, where momentum-ignition algos have been the trend leaders for years, one might as well listen. </p> <p>In other words, as MarketWatch adds, Gundlach is saying the S&amp;P 500 not only needs to set a fresh record, but it also needs to trade more than 3% above its highest closing level. As of Wednesday, the index is 1.9% off its record close, which as we showed recently is a 18x non-GAAP multiple and a post-crisis record 24x for GAAP EPS.</p> <p>Gundlach’s vaunted expectations are at least partially grounded in the view that <strong>stocks’ recent advances aren’t based on any shift in market fundamentals</strong>. As noted yesterday, Gundlach believes the recent run up is due to a short squeeze.</p> <p>Some observers have credited Wall Street’s push higher to investors’ belief that U.S. central bank’s desire to raise rates is a reflection of the health of the U.S. economy. Last week, investors and market pundits grappled with the prospect of higher rates after minutes from the Fed’s April meeting, released May 18, indicated that most members were inclined to raise interest rates as early as June. </p> <p>Gundlach does not buy it. MW adds that "Gundlach isn’t confident that the economy is out of the woods, even as data, including Tuesday’s report on the sale of new homes, show improvement. April’s new-home sales soared 16.6%, representing the biggest monthly jump in 24 years. <strong>“Embedded in the market is the belief that the Fed has some supersecret knowledge that the economy is really good,” </strong>Gundlach said."</p> <p>Gundlach's take, or lack thereof, on the market was the same as that presented previously to Reuters: "It’s just an observation, but stocks over the past 18 months have gone nowhere,” Gundlach said, reiterating comments he made earlier in the week when he characterized investing in stocks as “dead money.” The S&amp;P 500 is up 1.8% so far in 2016. </p> <p>Contrarian to prevailing sentiment that Yellen will continue beating a hawkish drum, Gundlach believes that Fed Chairwoman Janet Yellen will continue to maintain a relatively dovish posture at her next public appearance on Friday, espousing a cautious approach to rate hikes. And how the market responds to Yellen may provide better insight into the sustainability of this rally.</p> <p>To summarize: rangebound market, limited by the Fed's actions, but chase any big bounce above 2,200... or substantial drop.</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="640" height="360" alt="" src="" /> </div> </div> </div> GAAP Gundlach Janet Yellen Jeff Gundlach Reuters Thu, 26 May 2016 11:47:15 +0000 Tyler Durden 561924 at Frontrunning: May 26 <ul> <li>Wall Street Crime: 7 Years, 156 Cases and Few Convictions (<a href="">WSJ</a>)</li> <li>Japan's Abe points to 2008 crisis as G7 leaders debate global risk (<a href="">Reuters</a>)</li> <li>Brent Crude Rises Above $50 a Barrel (<a href="">WSJ</a>)</li> <li>New York financial regulator gearing up to probe online lenders (<a href="">Reuters</a>)</li> <li>At Swinging Wall Street Parties, the Feds Are Now on the Prowl (<a href="">BBG</a>)</li> <li>Do U.S. Killings of Militant Leaders Work? (<a href="">WSJ</a>)</li> <li>Fed's Bullard: global central bank policy divergence has been priced in (<a href="">Reuters</a>)</li> <li>Insurers Seek Big Premium Boosts (<a href="">WSJ</a>)</li> <li>The Little-Known Alibaba Unit That Prompted an SEC Probe (<a href="">BBG</a>)</li> <li>No Treasuries Left for Wall Street Dealers Amid Blowout Auctions (<a href="">BBG</a>)</li> <li>Migrant numbers growing again at Calais camp (<a href="">Reuters</a>)</li> <li>China's economic planner warns against irregular offshore debt issuance (<a href="">Reuters</a>)</li> <li>China central bank to keep policy slightly loose (<a href="">Reuters</a>)</li> <li>Qatar Stuns Mideast Debt Market With Record $9 Billion Bond (<a href="">BBG</a>)</li> <li>Greece’s Journey to Redemption Remains a Long One After Aid Deal (<a href="">BBG</a>)</li> <li>Atomic bomb survivors to attend Hiroshima event for Obama visit (<a href="">Reuters</a>)</li> </ul> <p>&nbsp;</p> <p><strong>Overnight Media Digest</strong></p> <p><em><span style="text-decoration: underline;">WSJ</span></em></p> <p>- Hillary Clinton's use of a private email server and her lax record keeping while secretary of state violated the department's policies, an independent watchdog said, a rebuke that keeps the issue alive as she campaigns for president. (<a href="" title=""></a>)</p> <p>- Twitter Inc on Wednesday confirmed it is curtailing an advertisement effort that encouraged people to purchase products from merchants without leaving the social-media service. (<a href="" title=""></a>)</p> <p>- Eleven states, led by Texas, are suing the Obama administration over a new policy saying public schools must let transgender students use the bathroom of their choice - calling the directive "a massive social experiment" running roughshod over "common-sense policies", according to the complaint. (<a href="" title=""></a>)</p> <p>&nbsp;</p> <p><em><span style="text-decoration: underline;">FT</span></em></p> <p>* British Prime Minister David Cameron urged young people to register to vote for the EU referendum scheduled next month.</p> <p>* Microsoft Corp said on Wednesday it will cut back and take a charge of about $950 million for its smartphone business, just two years after it bought handset maker Nokia.</p> <p>* Citigroup Inc has agreed to pay $425 million to resolve civil charges that it tried to manipulate foreign exchange and interest rate benchmarks</p> <p>&nbsp;</p> <p><em><span style="text-decoration: underline;">NYT</span></em></p> <p>- Alibaba Group Holding Ltd, the e-commerce giant, said Wednesday it was under investigation by U.S. securities regulators over its accounting practices, a potential setback for a company long seen as a symbol of China's growing technological might. (<a href="" title=""></a>)</p> <p>- Volkswagen AG is challenging allegations made by the Justice Department over its diesel emissions scandal, questioning the American authorities' jurisdiction and contending that the accusations against it do not justify penalties. (<a href="" title=""></a>)</p> <p>- The French pharmaceutical company Sanofi SA said on Wednesday it would seek to replace the board of Medivation Inc after the American drug maker's directors rejected a $9.3 billion takeover offer. (<a href="" title=""></a>)</p> <p>- Citigroup Inc on Wednesday became the latest big bank accused of trying to manipulate global interest rates, a reminder of Wall Street's wide-ranging abuse of power in these markets. The Commodity Futures Trading Commission, a federal regulator that oversees Wall Street, announced $425 million in penalties against Citigroup, covering two overlapping cases. (<a href="" title=""></a>)</p> <p>- Takata Corp, the Japanese airbag maker embroiled in a huge recall, has hired the investment bank Lazard and is seeking a cash infusion. The company said it was also seeking to work out a deal with affected automakers on sharing the costs of replacing millions of airbags, a move it said was crucial to "enabling Takata to remain a viable and valued global supplier." (<a href="" title=""></a>)</p> <p>&nbsp;</p> <p><em><span style="text-decoration: underline;">Canada</span></em></p> <p>THE GLOBE AND MAIL</p> <p>** Canada's Competition Bureau is setting its sights on the booming condominium sector in the Greater Toronto Area, ordering more than 100 condo boards to hand over records as part of a sweeping criminal investigation. The bureau is probing what it calls "allegations of bid-rigging and conspiracy" involving the region's multimillion-dollar condo renovation industry. (<a href="" title=""></a>)</p> <p>** Canada Goose Inc is investing in its first branded stores later this year. A 4,500-square-foot location at Yorkdale Shopping Centre in Toronto will be the first to open in October, followed by a 4,000-square-foot store in the SoHo neighborhood of Manhattan, scheduled to open in November. (<a href="" title=""></a>)</p> <p>** A cloud of noxious particles brewing in the air above the Alberta oil sands is one of the most prolific sources of air pollution in North America, often exceeding the total emissions from Canada's largest city, federal scientists have discovered. (<a href="" title=""></a>)</p> <p>NATIONAL POST</p> <p>** Canada police have arrested 55 people and laid more than 300 charges following a joint investigation aimed at disrupting drug distribution networks in northeastern Ontario. Drugs have been blamed for fuelling a suicide and overdose crisis in Attawapiskat and other remote First Nations communities along the James Bay coast. (<a href="" title=""></a>)</p> <p>** Bank of Montreal kicked off the latest bank earnings season by substantially increasing provisions for energy-related credit losses in the second quarter. At the same time, the bank took a C$132 million ($101.8 million) after-tax restructuring charge to cover severance costs to reduce the workforce by 4 percent as more customers shift to mobile and online banking. (<a href="" title=""></a>)</p> <p>** The Chinese insurance company Anbang Insurance Group Co Ltd is set for a major purchase in Canada. Sources indicate that the Beijing-based company with a reported $114 billion in assets has a deal to buy what amounts to a 34 percent stake in Bentall I, II, III and IV - a sprawling commercial 1.5-million-square-foot office complex, in the heart of Vancouver. (<a href="" title=""></a>) </p> <p>&nbsp;</p> <p><em><span style="text-decoration: underline;">Britain</span></em></p> <p>The Times</p> <p>The sale of Tata Steel's UK assets has been thrown into confusion after speculation that the business secretary has offered Tata a deal so attractive that it may yet keep Port Talbot and a dozen other facilities around the country. (<a href="" title=""></a>)</p> <p>The Guardian</p> <p>UK tax officials must "urgently" liaise with the French authorities to see if they have evidence of wrongdoing by Google that relates to the company's UK tax affairs, John McDonnell has said. (<a href="" title=""></a>)</p> <p>The watchdog for global trade has said leaving the European Union would push back trade barriers at a cost of 9 billion pounds a year to British consumers. (<a href="" title=""></a>)</p> <p>The Telegraph</p> <p>A pair of BHS suppliers have toppled into administration, resulting in 350 job losses, as the pain caused from the collapse of the retailer spreads through the sector. (<a href="" title=""></a>)</p> <p>Shell will axe almost twice as many jobs as planned following its controversial takeover of BG Group by cutting a further 2,200 from its global workforce. (<a href="" title=""></a>)</p> <p>Sky News</p> <p>Ministers will this week unveil proposals that would slash billions of pounds from the liabilities of the British Steel pension scheme as they seek to smooth a path for a buyer of Tata Steel's UK operations. (<a href="" title=""></a>)</p> <p>In an exclusive interview, Jon Woods, Coca-Cola's general manager for the UK and Ireland, said while no decisions had been made yet it was likely that shoppers would have to pick up the bulk of the cost. (<a href="" title=""></a>)</p> <p>The Independent</p> <p>Accountants have accused the government of seeking to raise hundreds of millions of pounds from the public in accidental overpayments in the new era of online returns, citing HMRC's botched handling of a shift to digital tax filings as fresh evidence of the dangers. (<a href="" title=""></a>)</p> <p>Cabin crew staff at travel operator Thomas Cook have voted to strike in a dispute over health and safety, the union Unite has said. (<a href="" title=""></a>)</p> <p>&nbsp;</p> Bond China Citigroup Commodity Futures Trading Commission Crude European Union Google Ireland Lazard Obama Administration Reuters Tata Twitter Twitter Volkswagen Thu, 26 May 2016 11:29:07 +0000 Tyler Durden 561923 at