IBB
320.74
+0.63
+0.20%
 
AAPL
146.28
+0.65
+0.45%
 
TVIX
20.51
-0.43
-2.05%
 
XIV
85.2
+0.89
+1.06%
 
TNA
55.78
+1.05
+1.92%
 
TZA
16.41
-0.35
-2.09%
 
UVXY
9.42
-0.21
-2.18%
 
NASDAQ
6265.25
+28.565
+0.4580%
 
S&P500
2438.3
+3.8
+0.16%
 
NYSE
11733.2
+20.68
+0.18%
 
IBB
320.74
+0.63
+0.20%
 
AAPL
146.28
+0.65
+0.45%
 
TVIX
20.51
-0.43
-2.05%
 
XIV
85.2
+0.89
+1.06%
 
TNA
55.78
+1.05
+1.92%
 
TZA
16.41
-0.35
-2.09%
 
UVXY
9.42
-0.21
-2.18%
 
NASDAQ
6265.25
+28.565
+0.4580%
 
S&P500
2438.3
+3.8
+0.16%
 
NYSE
11733.2
+20.68
+0.18%
 
Morning Note May 24, 2016

Education

 
Tues, May 24, 16  
08:30 ET Update:
[Stockboardasset] S&P futures 53bps
08:30 ET Update:
[Stockboardasset] Nikkei   50bps

 

 

Overnight, DXY continues to stabilize on the 95 handle testing the 95.50 mark. WTI along with /ES catch 3am-4am liquidity in a full risk advancement. Asia stocks close near 11 week lows, as global traders prepare for another FED rate hike. WTI fundamentals have slowly returned in sync with dollar appreciation. All of the sudden, everyone is concerned growing exports increasing in OPEC with no end in sight.  As BBG reports, but did not break the story of a parking lot of tankers of Asia is a major concern. This opens up the theory of China’s credit infused commodity boom is running its course, and could have negative implications on global economies this summer. After all, it was more failed supply side economics. There has been a lot of conversation on China’s NPLs and as of recent as FITCH has become very vocal to the matter. For the PBOC to stimulate growth ex credit induced, we look at the DEVAL of CNY, which may flare up near term. AUDJPY is testing 1Q16 lows signaling stress re-entered the region in early May. USDJPY trajectory is of negative slope, but remains in a counter wave since March testing the 110 handle. G7 FX leaders have stressed to the BOJ to limit FX intervention. Developing a rift between JPN & US. Exports prior sessions are in a 7 month decline printing -10%. Companies in JPN have stressed strong YEN appreciation is eating away in profits. Toyota recently stressed YEN appreciation has forecasted -35% if profits for the quarter. Over to the EU, where Moody’s downgrades DB debt two notches above junk. Strong rate hike forecasts for US enable risk on in EU for equities. Banking complex remains in stress at 2008 levels, as well as equity indexes.

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Morning Note May 23, 2016

Education

Mon, May 23, 16

08:30 ET                          Update:

[Stockboardasset] S&P futures flat

08:30 ET                          Update:

[Stockboardasset] Nikkei   -72bps

Overnight, the focus was on Asia economies. Japan’s trade balance came in at 823.5b vs. 540b estimate. Exports were -10% lower with 7 months of export declines. Clearly, Abenomics is not working as the economy teeter tots in and out of recession. Recent DEVAL of USD and BOJ Failures has led to a rapid appreciation of the YEN wrecking havoc on domestic companies. Nikkei reports Flash manufacturing PMI 47.6 vs. 48.2 in April point to a further slowdown. Japan and US develop rift at the G7 as the Lew instructs BOJ to halt FX DEVAL. Just recently, Toyota projects 35% profit plunge citing YEN appreciation. BBGTV last night Choyleva commented saying abenomics is pushing JPN into a financial disaster. JPN225 is -21% from the highs put in in the 2H15 as the trajectory has been negative sloped since. Over to China, our fears of CNY DEVAL grow by the day. USD strong theme angered the PBOC last week with a large DEVAL in the overnight session. FITCH came out with a slew of comments last night of bizzaro world in China defaults as well as chaos. NPLs of Chinese banks, and the commodity bubble deflating are of concern. Both Hang Sang and Shanghai A Index are on a negative trajectory slope since 1H15, as it appears more downside is possible for the summer session. Reports of HK economy slowing down in retail sales and collapse in real estate prices shows the health status of the Asian consumer.

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Morning Note April 21, 2016

Education

 

 

 

Morning Note-  
Thur, April 21, 16  
08:30 ET Update:
[Stockboardasset] S&P futures +9bps
08:30 ET Update:
[Stockboardasset] Nikkei +82bps

 

A Major rudder of the equities market today is the ECB decision. Moments ago, the ECB leaves interest rates unchanged and QE at €80bn. As expected, the decision was widely known heading into the release.

 

Full Statement:

At today’s meeting the Governing Council of the ECB decided that the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will remain unchanged at 0.00%, 0.25% and -0.40% respectively.

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Morning Note April 20, 2016

Education

Morning Note-  
Wed, April 20, 16  
08:30 ET Update:
[Stockboardasset] S&P futures +9bps
08:30 ET Update:
[Stockboardasset] Nikkei +25bps

 

Money manger’s long spec inventory is the highest since July’14 for WTI NYMEX. The thesis of the trade was on a false narrative of a freeze or production cut deal. As of prior weekend, the narrative was shredded to pieces as the Saudi’s prevented a deal from occurring. Immediately, the long spec inventory (highest in 2 years) repackaged the thesis of Kuwait’s strike will offset the break down in talks. 48 hours later Kuwait announces the strikes are over and production is back to normal. Saudi Arabia announces it can unleash +1 million additional barrels at moments notice. Russia announces oil output freeze may not be needed in June, and output may rise to 540m Tons this YR. Russia also mentions oil prices will return to lows in 3-4 weeks if producers can’t make a deal. What’s more disturbing is the thesis for 1Q16 of advancing WTI more than +50% was based on the false narrative of freeze deals. Also, the high correlation to US equities boosted some +15% simultaneously. Equities and commodities have advanced modestly on false narratives, but continue to levitate, which seems odd. Equities are in an earnings recession with macro data deteriorating, and the commodities continue oversupply and lackluster demand. So, who is propping prices and what is the end game?

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Morning Note Apr. 18, 2016

Education

Morning Note-  
Mon, April 18, 16  
08:30 ET Update:
[Stockboardasset] S&P futures -30bps
08:30 ET Update:
[Stockboardasset] Nikkei -300ps

 

Front running markets is the failed Doha meeting. Top producers of OPEC/Non-OPEC failed to cut or freeze production. Sunday evening, WTI open -7% discount vs. prior session, along with /ES -50bps.


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Morning Note April 15, 2016

Education

Morning Note-  
Fri, April 15, 16  
08:30 ET Update:
[Stockboardasset] S&P futures -26bps
08:30 ET Update:
[Stockboardasset] Nikkei -88bps

Overnight 1Q16 Chinese GDP printed as expected 6.7%. This is the lowest print since the great recession, as the economy financed more than $1 Trillion for the consumer. Global markets are mixed as Yellen’s excuses for rate hike delay is running out of options. The FED’s conundrum is pleasing all three ECB, BOJ, and PBOC simultaneously. Recently, the Shanghai Accord policies of arresting the USD to please the PBOC seem to be waning. The USD has firmed support at the 94 handle, as the PBOC earlier this week conducted the 3rd largest deval since August’15.

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Morning Note Apr 14, 2016

Education

Morning Note-
Thur, April 14, 16
08:30 ET Update:
[Stockboardasset] S&P futures  -4bps
08:30 ET Update:
[Stockboardasset] Nikkei  +100bps

 

 

Us Bank Earnings

  1. BLACKROCK 1Q ADJ EPS $4.25, EST. $4.30
  2. PNC Financial Q1 EPS $1.68 vs. $1.70 Est.
  3. Bank of America 1Q EPS $.21 IN LINE

Prior session, USD has stabilized with +150bps advancement. In return, the PBOC has devalued the YUAN by the most since Jan 7, 2016. Advancement in the USD has helped construct resistance in the mid 42s for WTI and has eased BOJ/ECB concerns of their appreciating FX. Kuroda comments overnight with a belief that the YEN appreciation and equities decline weren’t because of NIRP. China’s trade data prior session on imports was an accounting gimmick hiding the capital flows, which remain a concern. China’s imports data soared 116% compared side by side with other DM/EM countries is not plausible. Comes at a perfect timing as the IMF continues to downgrade global growth. EU woes of BREXIT are starting to make headlines in the US print. Morning polls have leave/remain tied at 39%. Eurozone March CPI Y/Y is flat at 0%.

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Morning Note Apr. 13, 2016

Education

Morning Note-
Wed, April 13, 16
08:30 ET Update:
[Stockboardasset] S&P futures  +50bps
08:30 ET Update:
[Stockboardasset] Nikkei  +300bps

Prior session WTI climbs to a 4-month high lifting US equities +100bps. The catalyst was on recycled news of Saudi and Russia Agreeing on a Production Freeze from 2-11-16 presented as “new news” with no sources. Repeat news is always good to stoke Algos. We notice that both actual news and recycled news were released on technically challenged areas for the SPX. Afterhour’s prior session, API released data on a large build than expected coming in at 6.2 million barrels. EIA is set to report this morning at 1030am.

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Morning Note Apr. 12, 2016

Education

Morning Note-
Tues, April 12, 16
08:30 ET Update:
[Stockboardasset] S&P futures  +35bps
08:30 ET Update:
[Stockboardasset] Nikkei  +182bps

 

Earnings season has officially kicked off with Alcoa financially engineering their vehicle to beat on earnings, but of course miss on revenues. Banks are forecasted to take a major hit 1Q16 as financial transactions were the lowest since the great recession. JPM will be the oracle tomorrow for the industry in earnings season. Negative guidance for SPX EPS reaches a 10 Year high, as 59% of the companies in the index have negative forecasts. The contagion is not limited to energy, but has spread through the system like a nasty cold. Simply, earnings peaked 1H15, and companies aren’t making as much money. Government statistics continue to be somewhat misleading, as everyone waits for growth or QE promising a recover. Seems, as the promise land of recoveries currently does not exist, as a global slowdown is under way. We question analyst who see a V-Shape recovery in earnings, due to global markets would have to support such growth. Frankly, the global economy is feeling the reversions of large K-Waves reverting in corporate profits and commodities. This is due to ZLB has not produced further growth, and NIRP has backfired in EU/JPN. The artificial demand lines in corporate profits and commodities were built on interest rate step down since the early 1980s, but now on ZLB is structurally maxed out; a reversion seems to be the obvious call here. So, does that mean new baseline growth trajectories will be issued? Prior week, we’ve seen Atlanta FED GDPNOW, Goldman, and Barclays revise 1Q16 GDP <1%. Jim Reid of DB talks about cycles and explains why he thinks late cycle fears continue to build and US corporate debt accumulation now compares with prior default cycles.  DB research desk has issued a list of recession fears, just like other countless banks.  The earnings implosion of 1Q16 and the illusion of liquidity in markets is concerning. Are global markets structurally topping out here from decades of debt, and an interest rate, which cannot go lower than ZLB? Of course there is NIRP, but latest in experiments in EU/JPN have not gone to plan. NPLs in EU baking industry are having a Lehman moment, and JPN is seeing a massive pullout of global funds. Central banks have to give more speeches, and secrete messages these days to support an agenda. This simply means their control over markets is deteriorating at an alarm pace. Even the latest WSJ article says central banks aren’t superhero’s. That’s a nail in the coffin for credibility, and by the way that’s how central banking works in the belief system.

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Morning Note Apr 11, 2016

Education

Morning Note-
Monday, April 11, 16
08:30 ET Update:
[Stockboardasset] S&P futures  +38bps
08:30 ET Update:
[Stockboardasset] Nikkei  +52bps

 

US Earnings Season will be starting today, as Alcoa will be the first to report. According to FACTSET,

the estimated earnings decline for SPX 1Q is -9.1%. US Banking complex will be in full focus, expected to have a disastrous quarter. Limited IPOs, No Tech IPOs, low-level M&A, and the overall financial transactions at a minimal have put a strain on banks. FACTSET states, 1Q16 will mark the 4th consecutive quarter Y/Y of declines in earnings since 4Q08, otherwise known as an earnings recession. As Bloomberg reports, buybacks are the only player in town buying equities, and during this reporting period will be on hold. Prior week, JPM, Goldman, and Atlanta FED GDPNOW revised 1Q16 GPD <1%. Financial conditions have to improve overall or US equities will face a mean reversion. FED speakers continue using jawboning comments to levitate SPX range bound for nearly 1-2 years ignoring fundamentals. Signaling the FED has made a policy error by not letting fundamentals dictate price discovery of equities.

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