"Removing the easy money punch bowl could trigger the next default cycle since high corporate debt levels have increased the sensitivity of borrowers to elevated financing costs."
"Today’s large increase of market volatility will clearly contribute to further outflows from systematic strategies in the days ahead: the total amount of these outflows may add to ~$100bn... but there is a strong probability of policy makers stepping in to calm the market."
"This is classic late-cycle behavior (when it’s difficult to get monetary policy exactly right, which leads to recessions), though it is more exaggerated because the durations of assets are uniquely long..."
Following Friday's shocking Fed crackdown, Wells Frago stock is reeling on Monday morning, tumbling as much as 9%, its biggest intraday drop since the August 2015 ETFlash Crash.
In the traditional post-payrolls data lull, traders will pay attention to central bank meetings out of the UK, Australia and New Zealand, the US non-mfg ISM and the swearing in of new Fed chair Jay Powell.
"The volatile start of 2018 surprised many investors and caused clients to ask if they should expect a sharp correction. In particular, investors ask about the likelihood of a repeat of 1987..."
"Ominously, we’re now in the deregulation stage following the bull run. We know what comes next, just not when. Count on one thing: it won’t be pretty. "
It is safe to say that after years of disappointment, investor expectations were low ahead of today's Deutsche Bank earnings report. Yet somehow, the biggest German lender failed to beat even the most pessimistic one.
Towards the end of financial bubbles, people who previously paid little attention to things like “quality” start trying to figure out what they actually own. The result is either funny or terrifying, depending on the point of view...
Welcome to the post-Janet Yellen era which sees the month of February begin with solid risk appetite as S&P futures initially rallied out of the gate only to fade into the European session, as 10Y Treasury yields spiked.
