"The murder of Taylor Force is grim evidence that the scourge of radical Islamic terrorism targets Americans and Israelis indiscriminately," says Cruz.
The market "pre-trades" The FOMC, with the biggest movers on FOMC days being the Dollar Index, Investment-grade credit, Homebuilders and Real Estate. Some residual momentum also carries over to the following week.
In a far less exuberant note than last week, Bloomberg's Lu Wang - author of the original article - writes that "while past deviations haven’t spelled doom for equities, the impact has rarely been as stark as in the last two months, when American shares lurched to the worst start to a year on record as companies stepped away from the market while reporting earnings. Those results raise another question about the sustainability of repurchases, as profits declined for a third straight quarter, the longest streak in six years."
Despite Goldman Sachs "short gold" recommendation - which came within pennies of being stopped out last week - traders, investors, and safe-haven seekers continue to push into the precious metals. Gold has "seen some exceptional flows after quite a few years of being the ugly redheaded stepchild, but it’s not moved into sort of beauty-queen territory," notes one commodity strategist as hedge fund net-long positionsare the highest since Feb 2015 and gold holdings in ETPs has soared to 18 month highs (amid the longest stretch of gains since 2012) squeezing the likes of Blackrock (in search of physical gold to meet ETF demand).
After January's record-smashing CNY3.4 trillion (half a trillion dollars!) surge in aggregate credit expansion in China, the post-lunar-new-year hangover hit hard in February as credit growth tumbled 77% from Janaury's level to just CNY780 ($112bn). This is the weakest February loan growth since 2011. Drastically missing expectations, and following authorities comments on the need to "monitor" excess credit growth, all categories of total social finance registered a sharp drop... which as Goldman warns, means China's GDP growth target will be "challenging."
It's no coincidence that three major BRICS nations are simultaneously under attack - on myriad levels: Russia, China and Brazil. The concerted strategy by the Masters of the Universe who dictate the rules in the Wall Street/Beltway axis is to undermine by all means the BRICS's collective effort to produce a viable alternative to the global economic/financial system, which for the moment is subjected to casino capitalism. It's unlikely Lula, by himself, will be able to stop them.
Given China's new focus on a basket of currencies, rather than pegging to the dollar alone, today's record-breaking reversal in EUR has sparked a yuuge 300 pips rally in Offshore Yuan (from 6.5270 to 6.4940) pushing to its strongest level since mid-December. At the same time, Gold is accelerating as China opens, pushing up to $1288 - new 13-month highs. Most critical is we are within $5 of Goldman Sachs "short gold" stop at $1291...
"We make no changes to our asset allocation at this stage as the relief rally has been too fast, in our view. We still do not feel comfortable taking more risk in equities until valuation or growth becomes more attractive.... With oil at the upper end of our commodities team's forecast range for 1H 2016, it could drive further volatility as we do not believe oil weakness is necessarily over"
Here, courtesy of Goldman, is a snapshot of the total size of Europe's Investment Grade market: this is where the ECB's trading desk will now be actively buying.
"They don't quite trust the higher spot prices yet," warned one trader as the changing shape of the Brent forward curve suggests oil producers have been locking in recent gains across the crude futures price structure.
- Pressure Is on Mario Draghi to Show ECB Has Tools to Boost Low Inflation (WSJ)
- Euro dips as ECB sets sights on deeper negative rates (Reuters)
- Ohio's 'dirty little secret': blue-collar Democrats for Trump (Reuters)
- Irish Economy Expanded 7.8% in 2015, Fastest Pace Since 2000 (BBG)
- Too Many Boats for Too Little Cargo Leaves Shippers High and Dry (BBG)
Many investors today are not very familiar with market history and tend to live only in the day-to-day mainstream narrative while watching little red and green graphs move up and down. This is not so much an issue in a relatively stable economic environment. The problem is, today we live in the most unstable economic conditions possible.
Indeed, what party other than the BOJ could be buying negative coupon debt? The answer is exactly why the coming financial crash will be so severe and long-lasting. To wit, it is front-runners expecting to cop a capital gain, and then get out before the house of cards collapses. That’s what might otherwise be called an ambush. The trillions of speculator dollars crowded into trades of this type throughout the global financial markets will never get through the narrow door of liquidity that remains in the casinos. The dotcom and the post-Lehman meltdowns were only the rehearsal.
Bears Exit Hibernation As Rally Fizzles On Dismal Chinese Trade Data; Commodities Slide; Gold HigherSubmitted by Tyler Durden on 03/08/2016 07:49 -0400
Those algos who scrambled to paint yesterday's closing tape with that last second VIX slam sending the S&P back over 2,000, forgot one thing - the same thing that China also ignored - central bankers can not print trade, something we have repeated since 2011. The world got a harsh reminder of this last night when China reported the third largest drop in exports in history, which crashed by over 25%, the third biggest drop on record, and no, it was not just the base effect from last February's spike, as otherwise the combined January-February data would offset each other, instead it was a joint disaster, meaning one can't blame the Lunar New Year either. In short, one can't really blame anything aside from the real culprit: despite all the lipstick that has been put on it, global trade is grinding to a halt.