That was the week Hillary began to look like the candidate who fell off a truck wearing a Nixon mask. Email-gate is taking on the odor of Watergate — the main ingredient of which was not the dopey crime itself but the stonewalling around it. Hillary is a horse that ain’t gonna finish. The Democrats better be prepared to haul Uncle Joe out of the closet, fluff up his transplanted hair, wax his dentures, give him a few Vitamin B-12 shots, and stick a harpoon in his fist for the autumn run against the White Whale (if Trump is actually nominated).
When the main economic event this week hits this Friday at 8:30 am EDT, when the BLS releases the May payrolls report, Wall Street consensus wil be expecting a 160,000 print, a number which will have a big impact on market expectations for a Fed rate hike at the June or July FOMC meeting. However, consensus may be disappointed for one reason: the Verizon strike could chop off as much as 35,000 workers from the headline payrolls print.
With the US closed for Memorial Day and UK markets also offline, overnight volumes have been weaker than normal on little newsflow. The main story remains the stronger USD which not only led to the lowest Yuan fixing since February 2011 but pushed the USDJPY as high as 111.50 overnight before paring gains. Europe’s Stoxx 600 is unchanged on poor volume, after earlier rising above the 200 DMA for the first time in 2016. US equity futures were 0.2%, or 4 points higher, currently resting just above 2,101 with the last trading day of May tomorrow expected to push the cash market over 2,100 as well.
We have tracked the problems of recently junked Noble Group - Asia's largest commodity trader - extensively over the past year. Then, moments ago things finally turned serious for the company, announced moments ago on the Singapore stock exchange, not only is CEO Alireza resigning, to be replaced by William Randall and Jeff Frase as co-CEOs, but the company will also begin the sale process of its Noble Americas Energy Solutions, one of its star assets, in a deal that will generate "significant cash proceeds", which is the best confirmation just how desperate for cash the company truly is.
In light of the continued push by state AGs to go after Exxon on climate change, five senators have sent a letter to U.S. Attorney General Loretta Lynch demanding that in two weeks, the Department of Justice "immediately cease its ongoing use of law enforcement resources to stifle private debate on one of the most controversial public issues of our time - climate change." Or, said otherwise, to end the government witch hunt against political opponents of president Obama's energy agenda.
By now we all know that Goldman Sachs is the gift that keeps on giving to the Clintons. Whether it's paying millions out for speeches, investing in family member's failing hedge fund ventures, or donating hundreds of thousands to the Clinton Foundation, Goldman seems to be keeping a close relationship with the family. But, with The Intercept dogging Hillary's every move seeking uncomfortable truths to awkward questions, perhaps the gift of Goldman is now a growing inconvenience on the campaign trail.
If the Trump/Sanders debate proceeds as planned in California, you’re about to witness one of the most important moments of a 2016 general election that hasn’t even begun yet. To say such a debate would be an unmitigated disaster for Hillary Clinton would be the understatement of the century. Let’s explore why.
There has never been a more destructive central banking policy than the Fed’s current maniacal quest to stimulate more inflation and more debt. That’s what is killing real wages and economic vitality in flyover America - even as it showers prodigious windfalls of unearned wealth on Wall Street and the bicoastal elites who draft on the nation’s vastly inflated finances. Indeed, Fed policy has had a double whammy effect on the flyover zone economy. It drove inflation up when down was needed; and its strip-mined capital from American business when increased capital investment was of the essence.
Yes, the “bull market” is currently alive and well. However, there are mounting signs that a “cancer” has taken hold and will eventually reveal itself in the not so distant future. Unfortunately, for most investors, the inevitable outcome of chasing yield with a complete disregard of the underlying risk will be catastrophic.
In what has been another quiet overnight session, which unlike the past two days has not seen steep, illiquid gaps higher in US equity futures (the E-mini was up 3 points and accelerating to the upside as of this writing so there is still ample time for the momentum algos to go berserk), the main event was the price of Brent rising above $50 for the first time since November with WTI rising as high as $49.97.
Heck of a Job ...
- Oil nudges $50 a barrel as investors bet on shrinking overhang (Reuters)
- From hinterland to wonderland: China's 'teapot' refinery boomtowns (Reuters)
- Peter Thiel Has Been Secretly Funding Hulk Hogan's Lawsuits Against Gawker (Forbes)
- China Wants to Set Prices for the World's Commodities (BBG)
- Big Banks Ladle On the Risk (WSJ)
- China Said to Plan Asking U.S. on Timing of Fed Rate Hike (BBG)
The single biggest event overnight was the PBOC's devaluation of the Yuan to the lowest since March 2011, setting the fixing at 6.5693, the highest in over 5 years and in direct response to a stronger dollar, which however if one looks at the DXY remains well below the recent highs in the 100 range, suggesting for China this is only just beggining. However, the fact that there was not more volatility in onshore and offshore overnight FX also comforted the market that at the same time as its was devaluing the PBOC was also intervening in the FX market, thus providing some assurance it would not allow runaway "risk off" sentiment prevail, nor would it promote another blitz round of capital outflows, leading to another gradual levitation in overnight risk.
This isn`t the first time Goldman Sachs has tried to hide behind the notion of a "Chinese Wall" in a defense against an apparent conflict of interests.