The potential outcomes are looking increasingly worrisome for financial markets across the board...
For those eager to cut to the chase and curious if overnight we have had another standard USDJPY ramp levitating US equity futures on low volume, the answer is yes. And since the USDJPY carry was patient enough, it managed to trigger the 2100 ES stops and as of this moment the futures were comfortably on the politically-correct side of 2100.
"A large number of body parts may indicate that a powerful explosion took place aboard the plane before it hit the ground."
It's just factory orders...ignore it. For the 11th month in a row, US Factory Orders have fallen year-over-year, re-acclerating the most recent drop to -6.9%, something that has not happened outside of a recession in history. In fact, adjusting for the one-off Boeing surge in July 2014 this is biggest Y/Y drop since October 2008. Month-over-month, orders fell 1.0% (more than expected), down for the 11th month in the last 14. The good news is that inventories dropped 0.4% (for the 3rd month in a row) but that will further hurt GDP, but, unfortunately, inventories-to-shipments remain at 1.35x cycle highs.
"I’m not authorized to make any sort of conclusions, but a plane cannot simply disintegrate"...
Based on the overnight market prints which are an oddly reddish shade of green, it took algos about 12 hours to realize that the reason they soared for most of October, namely hopes of an easier Fed which were launched with the terrible September jobs report and continued with increasingly worse US economic report in the past month, can not be the same reason they also soared yesterday after the announcement of a more hawkish than expected Fed statement which envisioned a stronger US economy and a removal of foreign considerations, which even more curiously took place on even worse data than the Fed's far more dovish September statement.
- Global shares rise as Riksbank helps ease Fed wait (Reuters)
- Asian Stocks Retreat Before Fed as Material Shares Lead Losses (BBG)
- For Fed, a Rates Puzzle Looms (WSJ)
- What the Superforecasters Say About When the Fed Will Lift Rates (BBG)
- U.S. Looks at Proposals to Step Up Fight Against Islamic State (WSJ)
- China Steel Head Says Demand Slumping at Unprecedented Speed (BBG)
- VW slumps to first quarterly loss in at least 15 years (Reuters)
After yesterday's dramatic late day market rout catalyzed by the tumble in the biotech sector in general, and Valeant in particular, and foreseen in its entirety by Gartman who went bullish just hours before, this morning US equity futures and European stocks have recouped some losses on the recursive, and traditional, hope that Mario Draghi will say something to push risk higher when he speaks in 2 hours at the ECB's press conference in Malta. And yet, just like Yellen a month ago, Draghi faces the paradox of reflexivity that after years of being ignored, is the "new thing" in town: how does he intervene and demonstrate he is readier than ever to set up stimulus, without panicking investors over euro area’s health.
It's Back To The Future As Stocks, Futures Jump On The Latest Abysmal Economic News; China Tremors ReturnSubmitted by Tyler Durden on 10/21/2015 06:57 -0400
26 years ago, today was envisioned as day when cars flew, holographic movies were box office hits, hoverboards roamed, and people were fired by fax. None of the happened. Instead the only "back to the future" moment this morning is a deja vu one we have seen every day for the past 7 years: bad economic news leading to surging stocks.
It is a generally quiet week on the economic front, with updates mostly on the housing front where following today's euphoric NAHB Housing Market Index, we have housing start and permits, blaims and existing home sales. Elsewhere, Fed speakers continue to speak, with Lacker, Dudley (again) and Powell confusing traders once more. The big news this week is earnings as some of the most prominent companies report, including IBM, Verizon, GM, Ebay, Coke, Boeing, Amazin, AT&T, CAT, Microsoft and P&G.
- Democratic rivals back Clinton on emails, but little else in scrappy debate (Reuters)
- Hillary Clinton Shows Relentless Efficiency in First Democratic Debate (WSJ)
- U.S. Examines Goldman Sachs Role in 1MDB Transactions (WSJ)
- JPMorgan Says Trading Pain Isn't Over After Third-Quarter Slump (BBG)
- Islamic State battles insurgents near Aleppo as army prepares assault (Reuters)
- Oil Slide Means `Almost Everything' for Sale as Deals Accelerate (BBG)
The US Federal Reserve orchestrated an artificial boom from 2001 to 2007 through artificially low interest rates and has resumed doing so once again. Entrepreneurs operating under faulty market signals created by the Federal Reserve malinvested hundreds of billions of dollars into capital intensive projects primarily in the housing sector. We paid for our boom with millions of destroyed jobs, wasted labor, and wasted resources. The Chinese Central Bank learned nothing from the Fed’s catastrophic experiment. They will reap the same rewards.
- U.S., Allies Demand Russia Stop Attacks on Syria Opposition (BBG)
- Russian Airstrikes Defend Strategic Assad Regime Stronghold on Syria’s Coast (WSJ)
- Emerging Stocks Head for Weekly Advance Before U.S. Jobs Data (BBG)
- Wage Strife Clouds Car-Sales Boom (WSJ)
- Oregon town reels from classroom carnage (Reuters)
- Oregon shooter came from California, described as shy and skittish (Reuters)
News That Matters