Citi Turns Bearish On Stocks On "Richer And Richer" Markets, Sees 65% Recession Probability; Janet Yellen DisagreesSubmitted by Tyler Durden on 12/03/2015 15:19 -0400
"Given the surge back towards the all-time highs in the S&P 500, we think that the best might be over for US equities and that indices might range trade more in 2016. We have downgraded US equities to neutral. This takes our overall equity weighting down to neutral, in many respects an extension of what we’ve been doing for most of this year as richer and richer asset markets, against a global background of economic risks, have made us more cautious."
"Equities Peak 12-18 Months After A Peak In Margins; We Are Now 15 Months After The Peak In Margins"Submitted by Tyler Durden on 12/02/2015 20:30 -0400
"Normally, equities peak 12-18 months after a peak in margins and we are now c.15 months after the peak in margins."
Overnight, Credit Suisse became the latest bank to join Goldman, JPM and increasingly more banks in predicting that 2016 will be a year in which investors will want to rotate out of equities. Specifically, the second largest Swiss bank said that it is "we reduce our equity weightings to our most cautious strategic stance since 2008 and take our mid-2016 S&P 500 target down to 2,150, the same as our end-2016 target." Here are the five reasons why CS just looked at the mounting wall of worry... and began to worry.
- Global Stocks Edge Higher on Expected ECB Stimulus (WSJ)
- Moment of truth as Puerto Rico faces crucial debt payment (Reuters)
- Obama urges Turkey to reduce tensions with Russia, stresses support (Reuters)
- Russian Media Takes Aim at Turkey (WSJ)
- Support Grows for U.S. Commando Raids to Fight Islamic State (BBG)
- Yuan Drops as SDR Approval Seen Prompting PBOC to Reduce Support (BBG)
Central planners around the world are waging a War on Cash because, as Ron Paul so eloquently put it "the cashless society is the [government]’s dream: total knowledge of, and control over, the finances of every single [citizen]." It is perhaps ironic then that Sweden, which became the first country in Europe to issue paper money in 1661, is probably going to be the first in the world to entirely eliminate it.
Mid-East Stocks, US Futures Slide As Goldman Warns Of Paris Attacks' Negative Implications For MarketsSubmitted by Tyler Durden on 11/15/2015 14:30 -0400
Following the weakness in the few minutes of after-hours trading on Friday's US session that overlapped with the first headlines from France, we are getting a first glimpse at the posible fallout from the Paris terror attacks. The Middle Eastern stock markets tumbled significantly with Saudi Arabia's Tadawul All Share index down 3% (biggest drop in 3 months) to its lowest since December 2012, and Dubai's FMG Index plunged 3.7% to its lowest since 2014. Short-run implication for the equity market is likely to be negative according to Goldman, with a notably higher risk premium regarding uncertainties about the medium-term political implications.
"Apple has lowered its component orders by as much as 10% according to our teams in Asia. The cuts seem to be driven by weak demand for the new iPhone 6s, as overall builds are now estimated to be below 80mn units for the December quarter and between 55-60mn units for the March quarter."
Not all is well on Wall Street, where when one cuts all the noise, just one thing matters: the year-end bonus. It is here that as WSJ reports citing the latest survey from Johnson Associates, bonuses are expected to see a broad drop for the first time in four years.
- Global Stocks Slip Lower (WSJ)
- Dollar sits pretty, bond yields rise as Fed bets firm (Reuters)
- Takeover Loans Have Few Takers on Wall Street (WSJ)
- Chinese Buyers Seek Dollar Assets as Promise of Yuan Gains Fades (BBG)
- Banking Giants Learn Cost of Preventing Another Lehman Moment (BBG)
- Eurozone Finance Ministers Won’t Release $2.15 billion Loan to Greece (WSJ)
But who is the governments' strongest ally in their 'war on cash'?
While the stock market had one of its best months in years, it was, like the jobs report, uncorroborated by almost everything else. The junk bond bubble, in particular, stands in sharp and stark refutation of whatever stocks might be incorporating, especially if that might be based upon assumptions of Yellen’s re-found backbone. As noted on several prior occasions, swap spreads have been sinking fast and to unprecedented levels. Though mainstream commentary will provide plausible-sounding excuses, mostly about corporate or even UST issuance, that is only because these places will not even consider that Janet Yellen has it all wrong; thus, they only search for possibilities that allow that narrative to remain undisturbed even though that narrative itself can never account for negative spreads.
So far today's trading session has been a repeat of what happened overnight on Monday, when following a weak start on even more weak Chinese data, US equities soared on the first trading day of the month continuing their blistering surge since that dreadful September payrolls report, which as we showed was mostly catalyzed by a near record bout of short's being squeezed and covering, which accelerated just as the S&P broke the 2100 level.
While understandably all eyes have been fixed on every monthly capital outflow update from China (even the ones that the Politburo is clearly massaging), few have noticed that one of the biggest total outflows currently in the global developed economy is taking place right in America's own back yard.
Did you know that the United Nations intends to have biometric identification cards in the hands of every single man, woman and child on the entire planet by the year 2030? And did you know that a central database in Geneva, Switzerland will be collecting data from many of these cards?
- World stocks on course for best month in four years (Reuters)
- Global Stocks Up Amid Stimulus Hopes (WSJ)
- BOJ Refrains From Adding Stimulus Even as Inflation, Growth Wane (BBG)
- U.S. Avoids Debt Default as Congress Passes Fiscal Plan (BBG)
- China naval chief says minor incident could spark war in South China Sea (Reuters)
- Exclusive Club: No High-Frequency Traders Allowed at Luminex (WSJ)