Credit Suisse

With Janet Yellen Just Hours Away, Directionless Markets Wait For A Signal

With Yellen's much anticipated speech just hours away, the already comatose market flatlined overnight in another directionless session, with European stocks and US equity futures practically unchanged, while Asian shares to a two-week low, led by Japan, as investors showed a reluctance to take on risk before Yellen’s speech. The dollar was a tad lower, along with oil which is set for its first weekly drop in a month. 

Frontrunning: August 25

  • Stock futures lower as countdown to Yellen speech begins (Reuters)
  • Italy quake death toll nears 250 as rescuers search demolished towns (Reuters)
  • Central bankers eye public spending to plug $1 trillion investment gap (Reuters)
  • Chelsea Clinton Plans to Stay on Board of Family Foundation (WSJ)
  • Bond Traders Are Desperate for Direction From Yellen in Jackson Hole (BBG)

Existing Home Sales Crush Recovery Narrative, Plunge Most Since Nov 2015

Following yesterday's 7 standard deviation beat in New Home Sales, Existing Home Sales for July missed expectations by 2 standard deviations dropping 1.64% YoY - the first annual decline since Nov 2015. The blame for this collapse - according to NAR's Larry Yun - is "frustratingly low inventory levels."

Madness In Mario-World: European Companies Issue Debt Simply Because The ECB Will Buy That Debt

Things are so absurd in the Eurozone that the ECB is buying private placement debt with little regard for safety. In turn, private equity companies issue debt simply because they know in advance the ECB will buy it. It’s a startling example of how the market is adapting to extremes of monetary policy, and it’s a safe conclusion the experiment will not end well.

New Home Sales Soar Most Since 2007 Driven By Southern Sales Surge

While the accuracy of the new home sales data is notorious volatile, with regular revisions wiping out both up and down-side outlier prints, moments ago the Census reported that in July, the US saw a whopping 654K new home sales, up 12.4%, from the prior month and higher by 31% from a year ago, smashing expectations of a 580K print, and a -2% decline from last month's pre-revision print of 592K (since revised lower to 582K).

FBI Probes Firm Belonging To Brother Of Clinton Campaign Chair For Ukraine Corruption Ties

While much of the media focus over the past week has been on the potential corruption scandal involving Ukraine's former president and Donald Trump's now former advisor, Paul Manafort, perhaps it is time for it to shift attention to the Podesta Group, the lobbying firm which belongs to Tony Podesta, the brother of Hillary Clinton campaign chairman John Podesta

US Futures Flat; Bonds Rise, Dollar And Oil Slide Over US Productivity Collapse Fears

Following yesterday's muted action which saw the S&P500 close unchanged, it has been more of the same listless trading overnight, with US equity index futures little changed as the Nikkei fell on the back of a stronger Yen, while government bonds rose and European stocks reversed early gains following the BOE failed bond monetization operation. Crude oil dropped for a second day after Saudi Arabia told OPEC that it pumped a record 10.67 million barrels of oil a day,

Buffett Exits Entire Credit Default Swap Exposure, As Citi's Appetite For Derivative Destruction Surges

It was considered one of the bigger paradoxes for years. Back in 2003, Warren Buffett famously dubbed derivatives “financial weapons of mass destruction” and yet over the next several years went ahead and entered a number of the contracts, including both equities and credit, ostensibly by selling CDS to collect up monthly premiums. However, at least when it comes to CDS, after several years of Berkshire trimming its credit derivative exposure, it is now completely out. Meanwhile, Citi is loading up on any CDS it can find...

European Bank Bloodbath Destroys Stress Test Credibility

If the goal of the EBA Stress Tests was to reassure investors and regain confidence that 'all is well' in Europe's increasingly fragile and systemically interconnected banking system, then it has utterly failed. The broadest European bank stock index is now down 7% from the post-stress-test spike highs, Italian banks are at record lows and being halted (despite Renzi's promises), Commerzbank is struggling with capital raise chatter, and Deutsche Bank and Credit Suisse are tumbling after being booted from the Stoxx 50.

Deutsche Bank, Credit Suisse Kicked Out Of Stoxx Europe 50 Index

What do you do when you are one of the biggest indices in Europe and are unable to rise simply because two of your biggest constituents, if not so much in market cap any more but certainly in terms of systemic importance,  just can't catch a bid? Why you delete them, of course even if the two names in question happen to be Europe's two largest banks, Deutsche Bank and Credit Suisse.