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Overnight Sentiment: Face(Book)ing The Selloff

Tyler Durden's picture




 

And so the unthinkable has happened: the FaceBook IPO has priced (at $38 as noted yesterday) into the ugliest possible tape imaginable, combining continuing bad news for JPM, ongoing deterioration for European risk markets (nothing new here), the need for the EU Commission to deny it is working on emergency Greek exit plans (we all know what that means) a request by Spanish banks to reinstate the short selling rule (as we predicted back in February), and a #Ref!-ing circular demand by Spain that banks deposit €30 billion into a deposit-protection fund. In other words more of the same. And yet FB has to trade up... or else. Which is why at least for the time being futures are soaring, on that, as well as on the rumor that Europe may close again today at 11:30 am Eastern. However, if 13 out of 14 previous trading days are any indication, expect the the rumor to then resurface that Europe will be opening again on Monday which will wipe out all of the day's gains since who on earth will want to be long risk over a weekend  in which many things in Europe can go bump in the night.

Overnight summary from BofA:

Market action

Overnight, Asian equity markets fell sharply, with the regional MSCI Asia Pacific Index sliding 2.6% after weaker-than-expected US economic data yesterday, downgrades of 16 Spanish banks and four of the Spanish regions by Moody's, and the continuing uncertainty surrounding Greece's fate in the Euro area. After a strong start to the year, the regional benchmark index now has fully erased this year's gains. 

Looking at the individual markets in the region, the worst performer was the Korean Kospi, down 3.4%. The Japanese Nikkei fell 3.0%, while the Shanghai Composite lost 1.4% and the Hang Seng fell 1.3%. 

European equities are set for their biggest weekly sell-off since September. In the aggregate, European equities are down 1.0%. Shares in London are underperforming, down 1.2%, while blue chips are outperforming, down only 0.2%. At home, futures have been fluctuating all morning, but currently point to a 0.4% rebound in the S&P 500 later today. That follows yesterday's 1.5% sell-off in the index. 

In bondland, Treasuries are selling off modestly across the curve. After hitting an all-time low of 1.697% yesterday, the 10-year yield is trading at 1.74% today. Meanwhile, the long bond is trading 5bp higher, at 2.83%. Despite a modest rally today, Spain's 10-year yield remains elevated, at 6.17%. 

The dollar is trading marginally higher, with the DXY index up 0.1%. WTI crude oil is basically flat, trading at $92.63 a barrel. Over the past several weeks, crude prices have fallen on fears that the European sovereign debt crisis will sap global demand.

Meanwhile, the yellow metal is up $16.38 an ounce, to $1,590.58. 
 

 

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Fri, 05/18/2012 - 07:12 | 2438892 bdc63
bdc63's picture

*LIKE*

Fri, 05/18/2012 - 07:18 | 2438898 Gief Gold Plox
Gief Gold Plox's picture

Facebook. Oh, how I'd love to short the hell out of them.

I can't for the life of me fathom the reason behind their existence. Utter garbage.

Fri, 05/18/2012 - 07:41 | 2438936 CPL
CPL's picture

Wait for it, this afternoon around 1pm EST.

Fri, 05/18/2012 - 08:16 | 2439021 ndotken
ndotken's picture

I'd pay $10 a share for $20 October puts if I could get them right now

Fri, 05/18/2012 - 10:14 | 2439579 CharlieSDT
CharlieSDT's picture

 I keep coming across articles indicating that the fraudulent sacks of shit on Wall St. are trying to value it the company at $100 billion. This is a absurdity of this assertion should be painfully obvious to anyone who takes even a cursory look at the numbers. The mathematics are simple enough even for small children to understand.

 

But of course on Friday, there will be a mass IPO hysteria and all sorts of retards will bid the stock up to ridiculous levels, and yes, Facebook will reach and probably exceed that $100 billion valuation. Then I will wait impatiently for a week or two for people to write some puts. On a long enough timeline, I guarantee you, Facebook is a losing investment and I can’t wait to take the other side of that bet.

 

http://www.singledudetravel.com/2012/05/why-facebook-isnt-worth-100-bill...

Fri, 05/18/2012 - 08:37 | 2439093 ZeroPower
ZeroPower's picture

Only the syndicate team and their traders have shorts from the first few days. Retail can short 3 or so days after IPO, allows brokers to get some inventory.

Fri, 05/18/2012 - 09:31 | 2439288 ndotken
ndotken's picture

Unless of course you're Goldman and you just say fuck the rules and sell them naked

Fri, 05/18/2012 - 07:28 | 2438904 slaughterer
slaughterer's picture

C'mon Tyler, lighten up.  The amateur hour counter-trend Biderman/Zuckerberg rally is upon us.   FB might even close above $38, and the IWM might close green for a change.  G8 is on top of the Greek thing, Angie offering support from Berlin to Athens all night.  The mood is changing against all this bear apocalypse.  Time for ZH to advise a strategic short-term long weighting to all its libertarian portfolio managers.  Not this repeated bearish intensity.  Do you know how much liquidity the MMs are going to gain through this IPO?  Do you know how much short interest can be squeezed at this point?  These MMs want to rally, and will do so at any small glimmer of fabricated hope planted by their friends in the Reuters news updates. 

Fri, 05/18/2012 - 07:29 | 2438909 ArkansasAngie
ArkansasAngie's picture

Money laundering.  A way for  Ben to release money without using a helicopter.

Fri, 05/18/2012 - 07:32 | 2438911 Dismal Scientist
Dismal Scientist's picture

Don't waste your breath. They don't want to hear it, if it goes against the meme of the site. The days of quality comments and discussion are long gone here.

Fri, 05/18/2012 - 07:54 | 2438938 bdc63
bdc63's picture

I don't think most people on here would disagree with slaughterer's comment ... the market is probably going to rally today due to the facebook IPO ... the market players will use the liquidity to run everything up ... the media will do whatever they have to do to add fuel to the rally ...

I'm not saying that I condone the market behavior ... or even that I plan to "play" today ... but what's not to agree with in slaughterer's comment?

Fri, 05/18/2012 - 07:53 | 2438958 dwdollar
dwdollar's picture

People are getting cash advances to buy this FB garbage. Hope you plan on selling to the smucks today, cuz if you're buying, you're one of the smucks.

Fri, 05/18/2012 - 08:34 | 2439086 disabledvet
disabledvet's picture

i do fail to see "the connection of the gold price to everything else...

Fri, 05/18/2012 - 07:43 | 2438944 BorisSDT
BorisSDT's picture

Last year Facebook had $3.8 billion in revenue, not profit, just revenue. We don’t know how profitable Facebook is because it’s a private company. Let’s say Facebook’s executive team is absolutely stellar and they have even better margins than Google with 27.5% (Google achieved 25.7% profit margin in 2011). That would mean they earned $1.045 billion in profit which would imply a P/E ratio of 95.7 and a return of only a little over 1% on your investment. That’s a pretty bad investment which does not even begin to keep pace with inflation.

 

Here's a full analysis: <a href="http://www.singledudetravel.com/2012/05/why-facebook-isnt-worth-100-bill...">http://www.singledudetravel.com/2012/05/why-facebook-isnt-worth-100-bill...

Fri, 05/18/2012 - 07:49 | 2438954 ArkansasAngie
ArkansasAngie's picture

But ... but ... it's better than zero!

/sarc

Fri, 05/18/2012 - 08:33 | 2439082 Urban Roman
Urban Roman's picture

Party like it's 1999!

Fri, 05/18/2012 - 07:13 | 2438893 Oh regional Indian
Oh regional Indian's picture

Which can mean only one thing.

Time's running out muppets. Only going to get wurse and wurser!

Jump!

ori

/time-faster-now/

Fri, 05/18/2012 - 07:43 | 2438943 CPL
CPL's picture

While we wait, Tea or Coffee sir?  Perhaps something stronger?

 

 

Fri, 05/18/2012 - 07:14 | 2438894 valley chick
valley chick's picture

*SHARE*

Fri, 05/18/2012 - 07:37 | 2438920 Oh regional Indian
Oh regional Indian's picture

Nice nice vc, I see what happened there!

*POKE*r

ori

Fri, 05/18/2012 - 07:18 | 2438895 firstdivision
firstdivision's picture

WTI recovered overnight losses...lol!  Gotta goose the premarket to get the IPO out the door.  Gotta sell to the retail....until retail doesn't buy.  Today will be a clusterfuck of a day.

Fri, 05/18/2012 - 07:46 | 2438949 CPL
CPL's picture

that' because the Canadian dollar is getting destroyed.

 

Wait for the push back if the CAN$ falls further and all sorts of triggers start going off like fireworks.

 

All those safety nets the "regulators" manufactured don't do a damn thing in the commodities arena or Forex.  It would be counter productive to trying to kill value in currencies.

Fri, 05/18/2012 - 08:05 | 2438996 Oh regional Indian
Oh regional Indian's picture

The loonie goes Batty? ;-)

How bowling!

ori

Fri, 05/18/2012 - 08:18 | 2439031 CPL
CPL's picture

Five years ago I would have cared withthe loonie acting as it's name sake.  This time, no fucks are given, five years to plan and develop alternative options.

 

It should be spectacular.  There are great things that are about to happen, for better/good or worse/shitty, and we all get to live through it.

Fri, 05/18/2012 - 08:33 | 2439078 Oh regional Indian
Oh regional Indian's picture

Indeed CPL. What a time.

ori

Fri, 05/18/2012 - 07:18 | 2438897 azzhatter
azzhatter's picture

My dream is for this goovernment tool Facebook to be a bust. I know it will trade crazy for a while but would love to see people turn away in droves

Fri, 05/18/2012 - 07:37 | 2438921 slackrabbit
slackrabbit's picture

agree. at least youtube has stuff i want to watch.......facebook, not so much.

Fri, 05/18/2012 - 07:59 | 2438975 CPL
CPL's picture

Not sure how co-ordinated the OP is, but at 1pm EST you'll see some really retarded news come out about facebook and it's founder.  I would ask all to retweet, the intention is to feed the algo's a line of horseshit with some carefully manufactured tweets and news stories about different prespectives on the viability of Facebook.

 

A steady stream of drek should push the Algo's into full retard territory.   None of the stories are true, except the HFT's and Algo's don't know that, slight variations to the theme will be tested and when we see a market reaction that is obvious we will be opening the flood gates and poison the shit out of the Algo's vocabulary.

 

 

Fri, 05/18/2012 - 07:24 | 2438900 Boilermaker
Boilermaker's picture

Is the Facebook IPO / POS moving the entire ES by almost 20 handles, straight up,  in 5 hours?

That's amazing.  Really, that's f'ing amazing.

Fri, 05/18/2012 - 07:29 | 2438908 slaughterer
slaughterer's picture

Meet the new world order.  Same as the old world order.   Psst psst Brian Sack II.

Fri, 05/18/2012 - 07:49 | 2438953 Boilermaker
Boilermaker's picture

I must just be stoopid.  I don't get how a social website IPO'ing for 40X earnings can move 500 completely unrelated individual large cap stocks at break neck speed.

It must just be me.

Fri, 05/18/2012 - 07:56 | 2438968 valley chick
valley chick's picture

and how many people connected on facebook?  Smells more of desperation in MSM to push it ...but what else is there?  IMO, facebook is going to have to change their rules to make it a sell item past today.  When that happens...something new will come out and people will flock to it. 

Fri, 05/18/2012 - 08:37 | 2439094 disabledvet
disabledvet's picture

trust me..."this new world is different from the old one."

Fri, 05/18/2012 - 07:24 | 2438902 ivars
ivars's picture

The trend USDx up, PMs stable/up is a real game changer, - but i did expect it when I started commenting on these issues. Some were worried that growing USDx will be bad for PMs. Yes it was, but up to some point where PMs start to become recognized as ultimate risk off asset.

This October 2011 USDx chart needs improvements in time (some months forward) and size ( lower maximum) scales, to be done when USDx reaches around 84, but the trend is correct, also timelines in year scales should be.

http://farm7.static.flickr.com/6103/6280084585_5979505d73_o.png

If confirmed, it means that everyone will now continue to run for USD for safety , so USDx will continue going up, but more and more the advanced ones will run for further safety to PMs. Safety from sovereign default of the USA ( and growing USDx does not help the USA economy and so deficits at all). High USDx means also low inflation in the States for next few years which means more encouragement to printing. So it does not change e.g this (trend wise):

http://farm7.static.flickr.com/6234/6280601222_40413db4b9_o.jpg

On other hands , when the USA partially defaults (and due to low inflation=> not by debasing USD=> but really by not paying interest) , which should not be more than 3 years away, a certain reset will happen ( and of course after that USD will be debased as well and inflation will appear) which may involve also many bad legislative actions towards holders of PMs. Until those days, paper game still can be played carefully in USD markets, and good physical assets stacked. USA debt has entered unsustainable accelerating phase, superexponential or "parabolic". It will grow faster even than exponential projections, and crash (partial default) the same way Apple shares just did during last month and is continuing to do (after middle 2012 it can actually grow even faster than in this picture) :

http://farm7.static.flickr.com/6034/6280601378_89707aff01_o.png

So there is time, but very many political/legislative unknowns ( but we can assume by looking into history with what the governments will start).

Fri, 05/18/2012 - 07:29 | 2438906 libertus
libertus's picture

Today will be an up day in the US. Just wait until Europe closes and then the PPT buys all the shit they can with that extra 1010100010101010001010100101101001010101010 they just entered into their accounts. 

Fri, 05/18/2012 - 07:29 | 2438907 Barometer
Barometer's picture

This POS will end up making the Tulip Bulb look rational.

Fri, 05/18/2012 - 07:32 | 2438912 Convolved Man
Convolved Man's picture

Dispatch from CENTCOM.

 

Operation Facebook diversion is a go.

Hit Iran with all you got.  With any luck, by the time the MSM covers this story on the 10 pm news, we will have "Mission Accomplished".

Huh Rah.

 

Fri, 05/18/2012 - 08:38 | 2439097 disabledvet
disabledvet's picture

They don't call it Fox News for nothing...

Fri, 05/18/2012 - 07:33 | 2438915 Silverhog
Silverhog's picture

Investing in a FREE website where people post pictures of their kittens and other endless drivel goes against common sense.

Fri, 05/18/2012 - 07:51 | 2438950 bdc63
bdc63's picture

I absafreakinlutely cannot wait to listen in on the first "earnings" (and I use that word in the loosest way possible) call

MZ: "Profits? ... no, there aren't any profits -- we are not focused on making money.  I thought I made that clear before we IPOed.  We're on a social mission ..."

Fri, 05/18/2012 - 07:36 | 2438919 theprofromdover
theprofromdover's picture

This is all too predictable. The Facebook millionaires realise they will get one chance to profit, and the mugs at the Squid (for surely it is they) who agreed to increase the share totals, are going to grab what they can and hope to sucker their special clients.

Just another sign that the end-game is near.

Facebook could be wiped out by a competitor in 6 months. Facebook is like a mobile phone, look how fast a new model wipes the floor with the competition (probably through word of mouth on Twitter & Facebook, hahaha)

Fri, 05/18/2012 - 07:40 | 2438928 valley chick
valley chick's picture

remember MY SPACE ?  How long did it last?

Fri, 05/18/2012 - 07:50 | 2438956 Boilermaker
Boilermaker's picture

pets.com

If I'm going to order a 30 lb bag of dogfood, I want it via UPS.

Fri, 05/18/2012 - 08:12 | 2439012 valley chick
valley chick's picture

@Boilermaker.....presently on facebook...companies give free stuff and coupons out and people *LIKE* the various companies for the promotions.  But to click on ads...no interest and is why GM probably pulled their ads.  As GM mentioned they are still keeping their "free" page for they can still interact with the public.  IMO, if it isn't free people are not going to buy it on facebook.

Fri, 05/18/2012 - 07:38 | 2438925 skipjack
skipjack's picture

http://www.telegraph.co.uk/finance/financialcrisis/9273209/Global-banks-...

 

Global banks see market rally on Greek exit Major global banks are advising clients to prepare for a stock market rally and a resurgence of the euro if Greece is forced out of monetary union, betting that world authorites will flood the international system with liquidity.
Fri, 05/18/2012 - 07:38 | 2438926 booboo
booboo's picture

The KGB is jealous so they are developing their own social network site called Smash Face.

Fri, 05/18/2012 - 07:42 | 2438934 slackrabbit
slackrabbit's picture

So whens the next greek bank holiday? 

Vote

A this weekend

B next weekend

C two weekends away

D next month

 

<sarc> winner gets a ginso and a free set of steak knives </sarc>

Fri, 05/18/2012 - 07:42 | 2438939 crawl
crawl's picture

FB FB FB
If you have one shot for each time you hear FB on the financial news channels, you will have alcohol poisoning under an hour, assuming you are a well seasoned drinker.

Looks like a green day in the markets with all the FB hysteria. Just waiting for the unicorns to show up.

Fri, 05/18/2012 - 07:43 | 2438942 TheSpiritOfTheTimes
TheSpiritOfTheTimes's picture

Well concerning "the need for the EU Commission to deny it is working on emergency Greek exit plans (we all know what that means)"

You may want to have a look at this:

"EU confirms contingency plans"

http://translate.google.com.hk/translate?hl=en&sl=de&tl=en&u=http%3A%2F%...

Fri, 05/18/2012 - 07:50 | 2438951 Downtoolong
Downtoolong's picture

And yet FB has to trade up... or else.

It’s sad. Facebook is the leading example today of the purveyors of economic fraud and deception that Wall Street has become. It’s all for them and the insiders on the deal. Everyone else, including the current Facebook user base will eventually lose.  I’ve been reading these columns for a month now about Facebook’s IPO. The authors typically try to be constructive or even positive. That’s what they’re getting paid to do. Some are getting paid directly or indirectly by Facebook’s marketing department. But, when you read the comments sectionn you learn the truth about it, how badly most people really feel about this company, its services, and the management team that runs it.  It’s vastly different from what Facebook and Wall Street is telling us. That doesn’t matter in the final outcome, and that’s the point. Things only happen in our economy today when Wall Street wants them to. That’s the power they wield. It’s not about what Main Street wants or values, it’s about what Wall Street wants, and just because they said so.

Oh yea, I almost forgot. It’s about saving the children, at least that’s what Facebook and Wall Street says.

Fri, 05/18/2012 - 08:43 | 2439107 disabledvet
disabledvet's picture

hey, "we've lost billions in the Jamie Dimon fiasco"...let alone the euro debacle which is TRILLIONS. "It's Facebook or we all die here, Jack." Facebook it is!

Fri, 05/18/2012 - 07:52 | 2438960 ZeroPoint
ZeroPoint's picture

Penny stock status in 3...2...1....

 

 

Fri, 05/18/2012 - 07:53 | 2438961 Central Wanker
Central Wanker's picture

FED will have to "Like" Facebook stock a lot in the coming weeks.

Fri, 05/18/2012 - 07:57 | 2438973 Boilermaker
Boilermaker's picture

WSJ:  Stock Futures Edge Up Ahead of Facebook Debut

So, Facebook is pushing the entire multi-trillion dollar equity market up.

Yea, there's no bullshit involved in this.

Fri, 05/18/2012 - 09:24 | 2439255 Money 4 Nothing
Money 4 Nothing's picture

Laundry is comming home all clean and folded?

Fri, 05/18/2012 - 07:59 | 2438976 Arnold
Fri, 05/18/2012 - 08:40 | 2439103 LawsofPhysics
LawsofPhysics's picture

Does anyone know how soon you can buy puts?

Fri, 05/18/2012 - 09:23 | 2439252 Money 4 Nothing
Money 4 Nothing's picture

I don't know, but I think Tuesday EBD would be a good time to do it.

Fri, 05/18/2012 - 08:46 | 2439119 Miss Expectations
Miss Expectations's picture

I did some You Tube browsing, looking for Jamie Dimon so that I could try to understand what he's about.  I found his address to the Harvard Business School MBA Class of 2009.  I do believe in reptilians, I do believe in reptilians, I do believe in reptilians...what choice do I have after watching this?  What he says vs. what he does is stunningly diametrically opposed.

"James "Jamie" Dimon (MBA 1982), chairman and CEO of JPMorgan Chase & Co., who has been listed by the Financial Times as one of the leaders most likely to lead the world out of the financial crisis, offered wide-ranging words of wisdom and advice to members of the Harvard Business School MBA Class of 2009 at Class Day exercises on the HBS campus."

http://www.youtube.com/watch?v=9T9Kp4NE5l4

 

Fri, 05/18/2012 - 09:17 | 2439230 lostcause
lostcause's picture

 Maybe Tyler can do a report on all the lost productivity from the 900+ million users of Facebook.  After all that's all these people seem to be doing while at work.

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