Thur, March 31, 16
08:45 ET Update: [Stockboardasset] S&P futures Flat
08:45 ET Update: [Stockboardasset] Nikkei -136bps
The Crude Awakening will be not just be WTI reverting back to a mean prior to the Shanghai Accord, but SPX will go back to fundamentals. SPX has undergone 3 consecutive quarters of decline in earnings commonly referred to as an earnings recession. 1Q16 is set to report with buybacks on hold could put an end to this rally unless earnings improve. According to Factset, negative earnings for 1Q is forecasted marking the 4th consecutive quarter Y/Y since 4Q08. SPX Price to ebitda just hit the highest ever. Overnight, we saw S&P downgrade the Chinese outlook to negative from stable, due to debt load. PBOC made a statement by squeezing Yuan shorts the most since 2005. Reuters reported OPEC production increase this month contrary to the narrative advancing WTI/BRENT from FEB lows. WTI fundamental imbalances have only gotten worse since Feb as inventories continue to build. With another surge in inventory, along with precedents supporting liquidation after such surge, we can only guess what happens next.