IBB
338.12
+1.28
+0.38%
 
AAPL
160.47
+0.59
+0.37%
 
TVIX
8.86
+0.03
+0.34%
 
XIV
109.53
-0.15
-0.14%
 
TNA
65.66
-0.59
-0.89%
 
TZA
13.47
+0.12
+0.90%
 
UVXY
16.22
+0.08
+0.50%
 
NASDAQ
6623.657
-0.348
-0.0052%
 
S&P500
2559.36
+1.72
+0.07%
 
NYSE
12349.97
-9.55
-0.08%
 
IBB
338.12
+1.28
+0.38%
 
AAPL
160.47
+0.59
+0.37%
 
TVIX
8.86
+0.03
+0.34%
 
XIV
109.53
-0.15
-0.14%
 
TNA
65.66
-0.59
-0.89%
 
TZA
13.47
+0.12
+0.90%
 
UVXY
16.22
+0.08
+0.50%
 
NASDAQ
6623.657
-0.348
-0.0052%
 
S&P500
2559.36
+1.72
+0.07%
 
NYSE
12349.97
-9.55
-0.08%
 
Morning Note August 2, 2016

Education

Fri, Aug 02, 16

In the overnight session, the BOJ and RBA have underwhelmed market participants in response to stimulus and or rate cut packages. Let’s start with the BOJ, where their modo is speak loudly but carry a small stick. In fact, the BOJ actual new spending stimulus will only be a quarter of the 28 trillion yen. In response, the USD/JPY was slammed to the 101 handle as the YEN strengthen against all it’s peers. JP10Y yield strengthen on fear of the BOJ phasing out QE. Renewed selling pressure was issued in the Nikkei with a potential downside target -20% discount of the 12918 level. On a laughable note, the BOJ plans to drop 2-yr time frame for it’s 2% target reports the Nikkei. JPM comes out bashing Japan seeing no risk on opportunities. God bless Kuroda.

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Morning Note August 1, 2016

Education

Fri, Aug 01, 16

US Media Blackout continues at Turkey’s Incirlik NATO air base home to US Nuclear Weapons. Nearly 7,000 security forces with some armored vehicles surround the facility. The move to surround the base comes weeks after a failed coup. Turkey’s minister for the EU has downplayed the situation saying this is a regular security check. FITCH released a statement specifying the credit profile of Turkey to be at risk. Turkey’s Central Bank has provided liquidity to the Lira lifting to .33413 level nearly +300bps from the low of .32 handle. Dip buyers have been in I-SHARES: TUR, but we say it’s to early to understand the full repercussions of the attempted coup, as well as weekend developments.

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MORNING NOTE JULY 28, 2016

Screen Shot 2016-07-29 at 8.15.37 AM

 

 

 

Fri, July 29, 16

Overnight, it’s been an eventful session in Asia with the BOJ failing to satisfy the market. Seriously? Did we expect anything different? The test trials seen in the media by the BOJ for the past few weeks is clearly evident that the storyline to lift stocks in the month of July is a farce. With one central bank down, the focus is how long can the ECB manipulate HY.

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Morning Note July 28, 2016

Education

Thur, July 28, 16

Since the FED started the rate hike cycle there is a vicious pattern that emerges. The FED will talk up the market of such hike leading into the live meeting, then when volatility is present in the market(s) will back away from claims. Or unexpectedly, pull the trigger in Dec’15 thus creating market turmoil. Prior session, the FOMC was slight more hawkish with statements of near term risks to the economic outlook have diminished. Future pricing of rate hikes were little moved: Sept 26% & Dec 45%. The biggest reaction we saw was on Forex as the DXY has shifted -126bps. Long and Short dated Treasury yields moved down almost like the market wanted to start chasing the recent Oil declines.

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Morning Note July 27, 2016

Education

Wed, July 27, 16

In the pre-US cash session, /ES is flat ahead of US Macro:

  • 7am: MBA Mortgage Applications, July 22 (prior -1.3%)
  • 8:30am: Durable Goods Orders, June P, est. -1.4% (prior -2.3%)
  • 8:30am Cap Goods Orders Nondefense, Ex-aircraft, June P, est. 0.2% (prior -0.4%)
  • 10am: Pending Home Sales M/m, June, est. 1.2% (prior -3.7%)
  • 10:30am: DOE Energy Inventories

2pm: FOMC Rate Decision

In overnight Forex, the BOJ uses media to test trial the market’s response to stimulus headlines. One headline sent the USDJPY +123bps to the mid-106 handle to only round trip after the BOJ denied reports. Simply the BOJ is feeling out the market. In other news, the DXY maintains the 97 handle ahead of today’s 2pm FOMC rate decision. With a slew of good economic news for the FED, along with a market that has not priced in a rate hike. This afternoon could be volatile. Over to EURUSD testing the 109 handle in a bearish flag since 7-24-16, along with GBPUSD in overhead resistance at 1.31 level. Major developments crossing the wires this morning of DB profits plummeting 98%. This is ahead of the EU stress test results to be released this Friday. DB in the pre-US cash session has declined -500bps on such earnings report. On Italian Banks, Monte dei Paschi is searching for fresh capital before the stress tests results. This indicates a confluence of Itilian and German banks could be under severe pressure upon stress test results later this week. Perhaps, the expansion of balance sheets by ECB and BOJ to roughly $180 bn per month signals the central banks preparedness in attempting to curb such systemic risk.

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Morning Note July 25, 2016

Education

Fri, July 25, 16

In the pre-US cash session, /ES is flat with limited economic data to be released. Stress in the commodity patch is present on oversupplied concerns relating to crude products as well as rig count increase ticking up production for the second week. This week’s /CL schedule will include GENSCAPE, API, EIA, and to finish the week Rig Counts. Our view this week for /CL are builds to continue to crude products, along with the threat of refiner shut-ins to start developing generating crude builds. We also believe production will tick up for the third week, along with rig counts on Friday. On the Forex perspective, the DXY maintains the 97 handle weighing on commodities. Forex tidal shifts this week will be produced by FOMC starting tomorrow, along with the BOJ meeting.

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Morning Note July 22, 2016

Education

Fri, July 22, 16

In the Pre-US Cash session, US Futures /ES are flat ahead of a light Macro data dump here in the States. US Market Manufacturing PMI data will be released at 9:45am; forecast prior 51.3. At the 1pm mark, Baker Hughes Rig Counts will be released. We expect an upward trajectory in the data, thus add to sell pressure in /CL heading into the NYMEX Close. Reports of the UK on renewed recession fears as the PMI shows the fastest contraction since 2009. In return, the GBPUSD has plummeted -156bps to the mid 1.30 handle, as EURUSD is form on 1.10 level. In return, DXY is back above 97 handle that should add FOREX woes to commodities, EM, Earnings, and or perhaps China DEVAL. Our target for EOY’16 DXY is 102 unless a major central bank kills the momentum. Draghi’s attempt prior session was minimal in arresting DXY appreciation by leaving rates unchanged.

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Morning Note July 21, 2016

Education

Wed, July 21, 16

US Market are under pressure in the Pre-US session after Kuroda says no need or possibility for helicopter money. What he really says, are global markets need a crisis so he can implement helicopter money. In return, FX shifts occurred with the USDJPY rejecting the 107.50 handle crashing down to the 105 handle and stabilizing in the low 106 range. The DXY sold off briefly, but has stabilized in the low 97 handle. Our new PT on DXY is the 102 handle EOY’16 unless central banks find a way to curb the momentum. EURUSD maintains the 1.10 handle with GBPUSD back down into the 1.318 level. We focus on TRY/USD otherwise known as the LIRA crashing to record levels -700bps since the coup attempt. An unorthodox DEVAL against the DXY, but hey it’s 2016 anything goes.

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Morning Note July 20, 2016

Education

Tues, July 20, 16

US Markets are set to open in an inside day as global upbeat in stocks continue. Quiet day for US data, as MBA mortgage applications index down 1.3% after rising 7.2% in prior week; purchases down 2.0%; Refis down 0.9%. US 30-YR has ticked up to 3.65 vs. 3.6 indicating the reflation for US housing is hitting objectives of the FED.

DXY maintains the 97 handle setting up for a monthly target of 102 before EOY’16. Strong dollar woes should remerge in earnings, commodities and EM unless central banks can replicate a new Shanghai Accord as seen in 1Q16. US Money Base is negative diverging US equities as the FED attempts to show the market the training wheels are off.

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Morning Note July 19, 2016

Education

Mon, July 19, 16

Our descriptive model for global equities signals stress in the pre-cash US session. In the 8am hour, a tidal shift of FX was under way as the DXY advances to the 97 handle. Leading to selling pressure in EURUSD, USDJPY, AUDJPY, and GBPUSD.

Recently, a concerted effort of central banks such as ECB buying corporate debt/high yield and the BOJ talking about fiscal stimulus measures such as helicopter money has levitated US markets. Central Banks have shown their cards indicating the financial system is still highly exposed to high yield or “junk” bond market, as well as the monetary pipeline of expanding global growth is at the dead end.

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