Investors should hope for the best while making preparations for less benign scenarios. This can be achieved by reducing leverage and speculation and having a healthy allocation to physical precious metals in the safest vaults in the world.
- Global stocks eye biggest rally in four years on Fed relief (Reuters)
- FOMC Minutes Sap Confidence in Fed's 2015 Rate Hike Resolve (BBG)
- Glencore to cut annual zinc production by a third (FT)
- Tea Party wave that lifted Republicans threatens to engulf them (Reuters)
- Why Kevin McCarthy Came to Quit Speaker Race (WSJ)
- A U.S. Recession Just Got a Little More Likely (BBG)
What may be the worst month in Volkswagen's corporate history is about to get a cherry on top, when the CEO of Volkswagen of America CEO Michael Horn is set undergo the Kangaroo Court treatment, when he testifies before a House Energy and Commerce subcommittee investigating last month's admission the company had installed on-board computer software designed to cheat on government emissions tests in nearly 500,000 of its four-cylinder "clean diesel" cars starting with the 2009 model year.
- Congress probing U.S. spy agencies' possible lapses on Russia (Reuters)
- Defense Ministers From NATO Hit Out at Russian Action in Syria (WSJ)
- U.S. Rules Out Cooperation With Russia as Moscow Launches First Naval Strikes on Syria (WSJ)
- Man Who Called China's Boom and Bust Says Use This Rally to Sell (BBG)
- For Volkswagen, New Questions Arise on U.S. Injury Reporting (BBG)
- Deutsche Bank May Swell $14 Billion Selloff in China Bank Stakes (BBG)
- Emerging market slowdown hits German exports (FT)
It was supposed to be the day China's triumphantly returned to the markets from its Golden Holiday week off, and with global stocks soaring over 5% in the past 7 days, hopes were that the Shanghai Composite would close at least that much higher and then some, especially with the "National Team" cheerleading on the side and arresting any sellers. Sure enough, in early trading Chinese futures did seem willing to go with the script, and then everything fell apart when a weak Shanghai Composite open tried to stage a feeble rebound into mid-session, and then closed near the day lows even as the PBOC injected another CNY120 bn via reverse repo earlier.
News That Matters
- How Iranian general plotted out Syrian assault in Moscow (Reuters)
- China FX reserves post record quarterly fall as cenbank steps up yuan support (Reuters)
- MSF calls for independent inquiry into U.S. attack on Afghan hospital (Reuters)
- Yen Advances as Bank of Japan Refrains From Adding to Stimulus (Reuters)
- Abu Dhabi Said to Explore Asset Sales After Slump in Oil Price (BBG)
- U.S. Oil Approaching $50 Boosts Stocks as Emerging Markets Surge (BBG)
News That Matters
"Suddenly, good news is busting out all over, and we can't not talk about them. I have been bearish for a while now, but if the facts change, I have to change with them," the "Mad Money" host said.
- Asian shares rise on fading Fed rate views (Reuters)
- U.S. Equity Futures Fall, Risking S&P 500 Rally as Copper Slides (BBG)
- More biotech pain, this time from the WSJ: For Prescription Drug Makers, Price Increases Drive Revenue (WSJ)
- VW Will Delay or Cancel Non-Essential Investments Due to Scandal (BBG)
- Russia Rejects No-Fly Zone Over Syria as Clerics Urge Reprisals (BBG)
- Historic Pacific trade deal faces skeptics in U.S. Congress (Reuters)
- German Factory Orders Unexpectedly Fall Amid Economic Risks (BBG)
The best headline to summarize what happened in the early part of the overnight session was the following from Bloomberg: "Asian stocks extend global rally on stimulus bets." And following the abysmal data releases from the past three days confirming that the latest centrally-planned attempt to kickstart the global economy has failed, overnight we got even more bad data, first in the form of Australia's trade deficit, and then Germany's factory orders which bombed, and which as Goldman said "seems to reflect genuine weakness in China and emerging markets in general and this will weigh on the German manufacturing sector."
News That Matters
- MOAR: Euro-Area Growth Seen Slowing in Sign More Stimulus May Be Ahead (BBG)
- MOAR: Japan's wage growth slows in August, keeping pressure on BOJ for more stimulus (Reuters)
- MOAR: Stocks, Copper, Emerging Markets Jump as Fed Delay on Rates Seen (BBG)
- And yet... Central Banks Lose Bond-Market Credibility as Woes Mount (BBG)
- World Bank cuts Asia growth forecast on China and US rates (BBC)
Following Friday's disastrous payrolls report, which confirmed all the pre-recessionary economic data and signaled that instead of approaching "lift-off" and decoupling from the rest of the world, the US economy is following the emerging markets into a slowdown in what may be the first global, synchronized recession since 2008, the market saw its biggest intraday surge since 2011 and the sharpest short covering squeeze in history, we are happy to announce that the "market" is now solidly back in "bad news is good news" mode.
According to a follow report, it is only a matter of time before far more widespread crackdowns take place within the auto industry where emissions fraud now appears as systemic as that of the global banking sector.