The global "risk on" melt-up continues. After a modestly hawkish Yellen warned that every meeting is live, and refused to take March off the table, sending the dollar and yield higher and the S&P to fresh record highs, world stocks rose hitting a 21-month high on Wednesday with the dollar rising for the 11th straight day, the longest positive streak since July 2015.
When BofA conducted its monthly Fund Managers' Survey, and asked what is the most likely bear market catalysts, the responses were as follows: "protectionism" = 34%, "higher rates" = 28%, "financial event" = 18%, "weaker EPS" = 15%. The "smart money" also said that the best protectionist investment is one: gold.
Just two days after North Korea embarrassed both the US and Japan by test-firing a new, nuclear-capable ICBM with a 2000 mile range, with neither Trump nor Abe able to articulate a clear retaliation strategy, moments ago Yonhap news agency reported that the elder half-brother of North Korean leader Kim Jong Un has been assassinated at Kuala Lumpur airport.
"The TRILLION dollar question is then reiterated: when does all of this “inflation as a good thing” tip over into “inflation with no growth”—aka STAGFLATION? This continues to be the chief concern of clients on recent marketing swings."
Less than a month into the new administration, President Trump security team has been plunged into "turmoil" following last night's unexpected resignation announcement by his now former National Security Advisor Mike Flynn.
European, Asian stocks declined, halting a global rally that sent U.S. stocks surging to new all time highs faltered, weighing on the S&P although the index rebounded modestly after a kneejerk announcement lower overnight after Trump's National Security Advisor announced his unexpected resignation.
Toshiba on Tuesday said that a 712.5 billion yen impairment charge on its nuclear operations will lead to a 499.9 billion yen net loss for the nine months through December. It also announced the resignation of its chairman and warned its solvency is in jeopardy.
"This is Rick...He carries the ‘football’ The nuclear football (also known as the atomic football, the President's emergency satchel, the Presidential Emergency Satchel, the button, the black box, or just the football)...Rick is the Man."
"I saw [the wedding couple] out on the lawn today...I said to the Prime Minister of Japan, I said, 'C'mon Shinzo, let's go over and say hello.'They've been members of this club for a long time...They've paid me a fortune."
Mr. Trump doesn’t seem to be an “internationalist,” seeking to build a new world order by political and military means. If that is so, he will sooner or later have to come to grips with the Fed’s policies - most notably with its liquidity swap agreements.
We discuss how Central Banks in England, Europe and Japan in concert with the United States has created the biggest levered up carry trade of all time in financial markets. The unwind of this trade is going to crash financial markets!