Morgan Stanley

Historic Volume Surge Forces Deutsche, Morgan Stanley To Shut Down Dark Pools

Following a historic surge in volume after the Brexit referendum, which sent bid/ask spreads soaring and led to a disorderly market at the European open, Deutsche Bank AG temporarily shut off outside market makers in its dark pool, SuperX. The bank told outside market makers that they would be prohibited from trading in SuperX on Friday, until the bank notified them it was ready to resume. Morgan Stanley’s dark pool was likewise turn "off" this morning as ATS operators scrambled to make sense of the broken market.

Stress Test 2016: Fed Says All 33 Banks Can Surive 70 VIX Without Needing Outside Capital

While hardly coming as a surprise to anyone, moments ago the Fed announced that all 33 banks have enough capital to withstand a severe economic shock, though Morgan Stanley trailed the rest of Wall Street in a key measure of leverage, Bloomberg reports. The biggest bank cleared the most severe scenario handily, with the exception of Morgan Stanley whose projected 4.9% leverage ratio tied for last place alongside a Canadian bank’s U.S. unit, falling within a percentage point of the 4 percent minimum. As a result of today's "test result" many banks will likely win regulators' approval next week to boost dividends.

Is The Market Looking At It Wrong: "Buy US Assets In Case Of Brexit" Says Greg Peters

Nmerous traders have suggested, that Brexit - should Remain indeed be victorious - could be one of the more significant "sell the news" events in recent years. However, an even more interesting hypothesis was proposed by Gregory Peters, senior investment officer at Prudential Fixed Income, who told Reuters on Tuesday that he thinks U.S. stocks and bonds are a "great" buying opportunity if Britain votes to exit the European Union.

Frontrunning: June 23

  • ‘Brexit’ Vote: U.K. Heads to the Polls in Historic Referendum on EU Membership (WSJ)
  • The Brits Have No Good Options on Europe Vote (BBG)
  • Stocks Rise With U.S. Futures as Pound Gains While U.K. Votes (BBG)
  • Trump and Clinton Place Bets to Woo Undecided Voters (BBG)
  • China brushes off doubts over support on South China Sea, says it is growing (Reuters)

Morgan Stanley Asks If This Is Just A "1937 Redux"

"Premature tightening of macro policies means risks of a relapse. In 1936, the Fed doubled the reserve requirements for banks and the Treasury began to sterilise gold inflows, slowing the growth of high-powered money. Fiscal policy was tightened, with the fiscal deficit narrowing significantly from 5.1% of GDP in 1936 to 0.1% in 1938. The premature and sharp pace of tightening of policies led to a double-dip in the economy, resulting in a relapse into recession and deflation in 1938."

Frontrunning: June 20

  • Britain's rival EU camps resume campaign as polls show momentum for 'In' (Reuters)
  • Britain's 'In' campaign wins more support, buoys markets (Reuters)
  • Brexit Campaigners Are Deceiving Voters, Cameron Says (BBG)
  • German trade body lowers export forecast: 'Brexit is poison' (Reuters)
  • Beyond the Turmoil, Central Bankers Dread Brexit’s Shadow (BBG)

Forget Brexit, It's The Banks Stupid!

Political instability for the EU is a significant and visible threat, but is not the immediate problem, which is financial. As a result of savings and spending imbalances, none of the core Eurozone states can stand on their own.

Morgan Stanley Expects Unprecedented Market Moves No Matter How Brexit Vote Goes

While by now practically every bank has forecast how the market would react to a Brexit vote, either to say or leave, nobody has quite come as close to dramatic forecast revealed by Morgan Stanley analysts overnight. The bank, which after the sharp move in the polls to Leave has now raised the probability of a vote to Leave to 45%, predicts that MSCI Europe would see a 15-20% drop in a base case BREXIT scenario. This compares to a 5-10% rally if the UK votes to remain in the EU.

There Is An Alternative To Yellen's Keynesian Bubble - Stockman Rages "Abolish The Fed"

The approximate hour Janet Yellen spent wandering in circles and spewing double talk during her presser yesterday was time well spent. When the painful ordeal of her semi-coherent babbling was finally over, she had essentially proved that the Fed is attempting an impossible task. And better still, that the FOMC should be abolished. The alternative is real simple. It’s called price discovery on the free market; it’s the essence of capitalism.

Frontrunning: June 15

  • Osborne Warns of Brexit Tax Toll as ‘Leave’ Gains in Polls (BBG)
  • Clinton wins D.C. primary, has 'positive' meeting with Sanders (Reuters)
  • Federal grand jury could charge wife of Orlando shooter (Reuters)
  • Brexiteers swiftly closing in on Remain as poll reveals there’s just one point between the two sides (Sun)
  • Trump gains slightly on Clinton after Florida attack: Reuters/Ipsos poll (Reuters)

Soaring Brexit Fears Spark Global Flight To Safety, Send 10 Year Bunds Tumbling Below 0%

The UK EU referendum is suddenly totally dominant in financial markets. The increased focus comes as the leave campaign has gathered steam as 4 polls yesterday afternoon/evening put the 'leave' campaign ahead. As a result of the continued global scramble for safety, German 10Y bunds finally dropped below 0% for the first time ever, while global risk assets are red around the globe.

Deutsche Bank Throws In The Bullish Towel, Says "Next 5% Move Is Likely Lower"

With Morgan Stanley, JPM, BofA and even Goldman Sachs having thrown in the towel on the ongoing stock market ramp, inspired in equal part by HFT momentum strategies, central banks, and a relentless short squeeze, Deutsche Bank's equity strategist, who until now valiantly was cheerleading to bullish case, has finally waved the white flag of surrender and in an overnight note admits that "the 5% move is likely lower."