Stocks Rise, Crude Tumbles As All Eyes On NFP
On Saturday we noted that “buy the dip” has now ceased to be a condescending nod to retail investors and/or a critique of central bank largesse. Instead, Wall Street now openly advocates it. Here’s the quote from Deutsche Bank: “We suspect the Fed’s insistence to raise again will therefore allow bouts of market price adjustment…
It’s So Simple: “Buy The Dip”
If you believe the Street, “buy the dip” has become scripture. We talked extensively this week about the Fed doing everything it can to preserve its optionality going forward. That was readily apparent on Friday when Yellen and vice Chair Fischer adopted seemingly contradictory lines. Optionality or no optionality, it’s starting to feel like we’re…
Markets Display Serious Risk
Friday saw the highest volume day since Brexit. High volume days happen during volatility spikes. Next week we look towards the unemployment numbers. This will be last unemployment report until the Fed makes their September rate decision. Let's take a look at a few charts that are showcasing risk in the market...
Konichiwa
Alright, well we made it. It’s Friday. Yellen spoke and we survived. The rally lives. Another few red points on the Dow and S&P and the Nasdaq’s marginally green. This was pretty easy to see coming. The optionality is critical. This is another one of those situations where you have to wonder what the alternative…
Confusion Reigns After Yellen Jackson Hole Speech
Well, we waited around all week only to get… nothing. Here’s the bullet point summary of Yellen’s Jackson Hole speech: FOMC STILL SEES GRADUAL HIKES APPROPRIATE OVER TIME OUR ABILITY TO PREDICT FED RATE PATH IS QUITE LIMITED FOMC EXPECTS LABOR MARKET TO CONTINUE TO STRENGTHEN SOME ESTIMATES SHOW REAL NEUTRAL RATE CLOSE TO ZERO…
When the Vol Drops, Get Small
The markets look to Janet Yellen's Jackson Hole speech tomorrow. This non-event has turned into event since Ben Bernanke's 2010 speech where he announced quantitative easing. Unless there is some major change in monetary policy from Yellen tomorrow I would expect a continuation of low volatility. Here's what I like to do in a low…
It’s All About The Flow
So one of the themes we’ve explored here and elsewhere recently is the extent to which the move into NIRP across Europe and in Japan has herded investors into USD credit thus putting a bid under Treasurys. However, as the dollar funding crunch has accelerated, hedging that exposure has nearly eliminated the spread. Deutsche Bank…
Aimless Markets Cast Wary Eye Toward Jackson Hole
It’s yet another day of aimlessness across markets as the entire financial universe awaits Janet Yellen’s Jackson Hole speech. Just about the only other thing anyone seems to care about this week is EpiPen prices. As far as Yellen goes, Citi conducted a survey to find out what the market expects. Here are the results:…
Boy, Oh Boy
Boy, oh boy, you know it’s August when this is a Bloomberg “headline”: DUNKIN' COLD-BREW COFFEE LAUNCH WAS `VERY STRONG’ Fantastic. We’re not sure what the counterfactual there would be (maybe “Dunkin’ says cold-brew launch was complete dud”), but hopefully this market will get some caffeine next week once everyone has the weekend to decode…
I Think It Moved
First real movement in weeks today. Janet Yellen is speaking at Jackson Hole on Friday and it seems many of the major sectors are preparing for that speech. Take a look at the financials with implied volatility higher than the indexes. Also, let's burst the myth that all options decay over time. Implied volatility on…