Bank of America

Bank of America

Stocks Rebound As Europe Ends 3-Day Losing Streak; VIX, Gold, Bonds Slide

S&P futures are modestly in the green, following gains in European and Asian shares, after the cash index climbed on Monday for the first time in three days as volatility tumbled amid abysmal trading volumes. European stocks joined an Asian stock rally following three days of losses. Bonds, gold, VIX and the yen declined despite another warning from Ray Dalio who said he was "reducing risk."

BofA: "This Is The Key Risk-Off Signal" Ahead Of This Autumn's "Big Fall"

An imminent Aug/Sept "big fall" trade is plausible if poor politics shows up in consumer confidence, US high yield credit spreads gap toward 500bps; tech leadership reversal, and most importantly, if the US dollar rises despite lower UST yields and further drop in US presidential approval ratings.

The S&P 500 Is Now Overvalued On 18 Of 20 Valuation Metrics

Based on BofA's 20 most widely used valuation metrics, the S&P remains substantially overvalued according to 18 of 20, the only exceptions being FCF, and relative to bonds where yields are depressed thanks to endless central bank monetization backstops.

S&P Futures, Euro, Stocks Fall After Fed's Low Inflation Warning

S&P futures, European stocks and bond yields all fell in early trade alongside oil and the euro after the latest Fed minutes expressed concern over weak U.S. inflation, while Asian equities rose overnight ahead of WalMart earnings and the latest ECB minutes

European Junk: "The Good-Looking Ones Are Always Bad News"

"I understand the attraction to shorting European junk. It’s easy to look dreamily at this chart and imagine spreads doubling to 5% without batting an eye... But there are a couple of problems with this trade..."

Two Stunning Facts About Last Week's VIX Explosion

While the events from last Thursday's volatility explosion may now seem like a distant memory, here are two stunning facts about last week's VIX explosion, and this week's subsequent vol collapse.

"You Could See Panic": PIMCO Joins Gundlach In Loading Up On S&P Puts

"If we see actual military altercation, markets can go a lot lower. And at the same time, volatility has been so low for so long that it doesn’t take much for markets to get worked up.... you will certainly see panic if all of this turns into a sustained military encounter."

The Secret History Of The Banking Crisis

"Accounts of the financial crisis leave out the story of the secretive deals between banks that kept the show on the road. How long can the system be propped up for?"