Risk Management

Dow Futures Slide Over 100 Points Despite Fed's Dovish Relent; Oil Drops On IEA Pessimism

After yesterday's torrid rally, which sent stocks higher the most in 2 months on the back of Lael Brainard surprisingly dovish comments, we have seen an unexpected profit-taking session overnight in ES, with US equity futures down 0.6%, driven largely by a renewed drop in oil prices which slid after the IEA said a surplus in global markets will last longer than initially estimated, persisting well into 2017 as reported previously.

Here Is The Catalyst That Could Unleash A "Violent Rally In Risk" Today

After years of seeing the Fed operate within this “reflexivity conundrum. the markets have already spoken (meaning already financially tightened enough) to a point where the Fed ONCE AGAIN has to back away from their “hiking threat.”  Back to “none and done,” which will likely merit a pretty violent rally in risk and reversal in rates."

Is A VaR Shock Just Starting: Here Is The Checklist

It appears we have a disagreement between two JPMorgan analysts: while one, namely head quant Marco Kolanovic anticipates a significant deleveraging by quant and algo funds, JPM's fund flow guru is desperate to talk down the threat from a coordinated global selloff, and concludes that a VaR shock may not be imminent after all.

Bubbles And Elevators: From FONC To F##K!

Volumes have been written on behavioral finance and the seemingly “irrational” decisions investors tend to make to avoid straying from the herd. This article examines a current example coined “FOMO” (fear of missing out), in today’s texting parlance. Through a better understanding of the psychological dynamics of bubble mentality, we hope to help investment managers better grasp the complex role they must play when their concern for poor expected returns and higher levels of risk  are pitted against their client’s fear of not keeping pace with the market.

85% Of Wall Street Expects a "Dovish Hike Signal" From Yellen Tomorrow

Earlier this week, Citi's head of G10 FX strat Steven Englander conducted a survey among 350 participants asking them what they expect from Janet Yellen's Jackson Hole speech. According to the vast majority, or 85% of the respondents, Yellen will lean toward one 2016 rate hike with hiking risk “overwhelmingly” in December even as September hiking risk is seen as “modestly underpriced."

What Janet Yellen Will Say At Next Week's Jackson Hole Meeting: BofA's Preview

"Yellen might argue that conditions are increasingly being met to further normalize rates before the end of the year, consistent with the latest communication from the FOMC. However, we do not expect guidance on the exact timing of the next hike.Yellen might argue that conditions are increasingly being met to further normalize rates before the end of the year, consistent with the latest communication from the FOMC. However, we do not expect guidance on the exact timing of the next hike."

Goldman Turns Outright Bearish: Says To "Sell" Stocks Over Next 3 Months

For those who believe that Goldman is just another incarnation of Dennis Gartman and are still bearish, you may want to close out any remaining short positions because moments ago, Goldman just released a new report in which the firm has gone outright bearish, with a "tactical downgrade to equities for the next 3 months."

Hillary Clinton Is In Deep Trouble: "Hordes Of Wall Street Executives" Descend Upon Philly

We believe Hillary Clinton lost the Presidency this past week. While the explosive DNC leaks will undoubtably have a long lasting effect, this post will barely reference the leaks. Rather, it will explain how recent decisions by the Hillary campaign played right into Trump’s hands by essentially waving a gigantic middle finger to the 73% of Americans who think the country is headed in the wrong direction.

Morgan Stanley Beats Despite 9% Drop In Revenue, Helped By Cost-Cutting, Strong FICC; Shares Jump

Following the example set by the other banks, earlier today Morgan Stanley, the last big bank to report earnings,  said its profit fell 12% in Q2 on a 9% drop in revenue even as the company weathered volatile markets that affected its investing and corporate clients. The EPS of $0.75, however, beat sharply lowered expectations of $0.60 on the back of sharp cost-cutting measures, pushing its shares up 3% in the premarket.