Mind The “Fracklog”: Here’s Why Oil Prices Can’t Sustain A Near-Term Bounce
There are two reasons why oil prices will have a difficult time sustaining a rally above $50/bbl. One reason is heightened tensions between Saudi Arabia and Iran. We’ve discussed this dynamic here before. Essentially, Iran is angling to ramp production to 4 million b/d. The (former) pariah state has already brought output back up to…
Yellen Testimony Overshadowed By Brexit, Soros Warns Of “Black Friday”
Janet Yellen trekked up Capitol Hill on Tuesday for her semi-annual Humphrey-Hawkins testimony. Frankly, it kind of feels like a snoozer. Here are some of the bullet points: WE DO HAVE LEGAL BASIS TO PURSUE NEGATIVE RATES NOT CONSIDERING NEGATIVE RATES BREXIT-RELATED FINANCIAL VOLATILITY COULD AFFECT U.S. I DON’T THINK RISKS TO FINANCIAL STABILITY ARE…
Stocks, Bonds, Commodities, And Gold: Trading Brexit
The good thing about the Brexit referendum is it’s this week. That rules out the painful prospect that we’ll have to endure the type of summer we suffered through last year when there was a Greece headline every five minutes on market days and every 10 minutes on weekends. Sure, there’s some event risk here,…
Everything Is Fixed, But Watch For “Tape Bombs” Ahead Of Thursday
We woke up Monday morning and everything was fixed. Actually, it started last night when the British pound suddenly spiked above 1.46. Liquidity was thin, according to traders who also told Bloomberg that market-makers in some global banks have been told to cease quoting short-dated GBP options until further notice. The GBP rally set…
Time To Rotate Out Of Stocks And Into… Overpriced Bonds?
It wasn’t a good week for stocks. The Dow and the S&P shed more than 1% while the Nasdaq lost nearly 2%. The problem: the UK may vote to leave the EU next week. “Brexit” - like “Grexit” before it - is something that most US equity investors neither care about nor want to hear…
In Dramatic Shift, Fed’s Bullard Says FOMC Should Stop Making Long-Run Projections
This has been the year that markets finally began to question central banks in earnest. It started in January when the Nikkei took a dive and the yen surged following the Bank of Japan’s decision to take rates into negative territory. That was the shot across the bow. By all accounts, the move below zero…
Brexit Drama Reaches Fever Pitch Following Death Of British MP
Even Jim Cramer admits it: global macro is in the driver’s seat. On Friday morning the boisterous Mad Money host bemoaned the fact that no one seems to care about anything but Brexit and geopolitics. “I’m probably the only person in the world reading the Kroger quarter,” Cramer lamented. “It’s only the biggest grocery store…
LendingClub “Solves” Its Problems: Will Buy Its Own Loans
Investors just aren’t going to learn when it comes to LendingClub. To be clear, this stock matters for two reasons. First, it’s a classic example of a “story” stock gone horribly wrong and as is usually the case, some investors are going to believe the story until they finally just go down with the ship.…
Brexit In The Driver’s Seat For Markets As “Leave” Odds Rise
“In any event, watch the BoJ tonight. USD/JPY sunk to 20-month low at 105.44 before bouncing following the Fed decision. If Japan doesn’t play this exactly right, you could see further yen strength - and we’ve seen what that does to US stocks.” That’s what we said on Thursday afternoon after the Fed struck an…
Fed Fumbles, Stocks Fall For Fifth Straight Session Ahead Of BoJ
It’s safe to say that didn’t go precisely as planned. Stocks closed in the red Wednesday despite a decidedly dovish Fed statement, and frankly it’s hard to know exactly what to make of that. To be sure, the outcome was expected, but even Esther George was on board as the Kansas City Fed chief withdrew…