Kuroda's decision to go full NIRP-tard is benefitting investors worldwide... in bonds. JGB yields hit record lows, 5Y Bunds are trading below the -30bps ECB deposit rate, and US Treasury yields are collapsing across the curve with 10Y below August's Black Monday lows back to 9 months lows...
Earnings per diluted share for the full-year 2015 now are expected in the range of $3.54 to $3.59, excluding expenses related to cost efficiencies announced earlier in January and asset impairment charges associated primarily with spring 2016 store closings. This compares with previous guidance in the range of $3.85 to $3.90. Updated annual guidance calculates to guidance for fourth quarter earnings of $1.85 to $1.90 per diluted share
"Actions have consequences"...
- World shares heat up as Bank of Japan goes sub-zero (Reuters)
- Stocks Rally With Bonds as BOJ Ends Grim January on High Note (BBG)
- Japan Follows Europe Into Negative Interest Rate Territory (WSJ)
- Decision On Oil Cut Only Possible If All Exporters Agree, Russian Energy Minister Says (BBG)
- Trump overshadows Republican debate even as he sits it out (Reuters)
- Trump skips debate, wins on social media (Reuters)
It is safe to say that nobody expected the BOJ stunner announced last night, when Kuroda announced that Japan would become the latest country to unleash negative interest rates, for one simple reason: Kuroda himself said Japan would not adopt negative rates just one week ago! However, a few BIS conference calls since then clearly changed the Japanese central banker's mind and as we wrote, and as those who are just waking up are shocked to learn, negative rates are now a reality in Japan. The immediate reaction was to send the USDJPY surging by nearly 200 pips, back to levels seen... well, about a month ago.
"The BoJ actions should lead to further intensification of global currency wars with central banks around the world trying to engineer sustained competitive devaluation against the background of slowing global trade and growth as well as persistent commodity price disinflation. With its latest measures the BoJ will allow Japan to borrow more growth from its trading partners and limit the severity of the imported disinflation."
"Unfortunately, it is not [a mistake]... This could be the end of the fix. It took 14 minutes to find a fix – they obviously found a fix way off of the market."
Well that did not last long. After initial exuberance over The BoJ's wishy-washy decision to adopt a 3-tiered rate policy including NIRP, markets have realized that without further asset purchases (which were maintained at the current pace), there is no ammo to lift stocks. An almost 200 point surge in Dow futures has been erased and Nikkei 225 has dropped 1000 points from its post BOJ highs... as 10Y JGB yields hit record lows at 11bps and 20Y JGB yields drop to 82bps - the lowest since 2003
Barring some miraculous 8% epic melt-up in the afternoon session - go down as the worst ever January for Chinese stocks. While that is a big enough deal, for now the 24%-plus plunge is the worst of any month since Lehman's fallout in October 2008. However, it is close... if the Shanghai Composite closes below 2667.50 today, January 2016 will become the worst month for Chinese stocks since 1994... quite a feat in a "stable" and manipulated market.
If Fox asked Facebook to tabulate the number of viewers at tonight's GOP republican debate, the answer would probably be over 1 billion. The reality is that most potential viewers will likely be hijacked to tonight's "alternative" event, the one taking place concurrently in Drake University in Des Moines, Iowa where Donald Trump will address Wounded Warriors & Veterans but what he will really do is school the rest of the republican field how to truly control the media narrative and to remain constantly in the spotlight especially when he noweher near it.
If the eurodollar and wholesale banking system had been sliced to such a thin margin again by 2011 so as to so heavily depend on the modern duality of gold, it not only would not survive it literally could not survive. The paper dilution we see now may just be that judgement finally seeking open admission.
What matters for Amazon has never been earnings: it was always top line growth (the company generated $107 billion in sales in 2015 and less than a billion in net income) and multiple expansion (or contraction).
The Goldman banker who helped arrange the financing for 1MDB, Malaysia's controversial development bank, is taking a "personal leave" and moving to Los Angeles from Singapore. Although it's not clear why Tim Leissner is making the change, the timing certainly is interesting...