Free Fall: British Pound Hits Three Decade Low, Crude Collapses
Ok, so two things: the British pound and oil. They’re both crashing. Let’s turn first to GBP, because it’s sitting near a 31-year low (inset). “There’s a lot of nervousness in the sterling market,” Commerzbank’s Thu Lan Nguyen dryly remarked on Tuesday morning. Yes, “a lot of nervousness.” You know, it’s the whole “a 30yr…
The Tired Rally That Refuses To Die
We’ve talked a lot about the likelihood of a US recession over the past couple of days (see here and here) - probably not exactly what everyone wanted to hear over the holiday weekend. It’s not so much that we want to come across as doomsayers. Rather, the point is to assess the extent to…
Another Take On Recession Risk And One Bank’s Look At Market “Stress”
If you’re looking for signs that the US economy will steer clear of recession, don’t look at the yield spread between 2-year and 10-year Treasurys: As Bloomberg’s Tracy Alloway noted on Monday, the curve is getting “flat as a pancake,” and that’s not generally a good sign for the economy. Bloomberg was referencing the latest…
Silver, Gold, Havens Bid Ahead Of Critical Week For US Equities
We’ve talked quite a bit of late about bonds and stocks sending conflicting signals. In fact, the bond/stock mixed message was in many ways the most important takeaway from last week’s euphoric bounce off the post-Brexit lows. Here’s a look at how risk performed versus yields on US, German, and Japanese government bonds: Notice yields…
The Brexit, the brally, and the brutal reality
TheoTraders must zero in on where the risk is in the market. Let's look at a comparison chart of the bonds, gold, and stocks. This will help us determine whether or not risk is still on the table.
“See No Evil”: A Recession Is Coming, But Who Cares?
Last year, the Bureau of Economic Analysis did away with recessionary GDP prints through the magic of “residual seasonality.” The thing about numbers is that they don’t, generally speaking, lie. But statistics sure do. That’s because numbers are just numbers until humans start tinkering with them. Once the human element is introduced, you can throw…
Look East On The 4th, That’s Where The Real Fireworks Are
As we head into the holiday weekend, why not think about China? Actually, wait. Don’t answer that. It’s the 4th of July. Independence Day. So for US traders, that’s probably one reason not think too hard about China. Let’s try that again: as we head into the holiday weekend, it’s important to remember that as…
Love It? Well Then Buy It!
If you see something, buy something. That’s been the mantra since Tuesday. Put simply: it’s up. It’s all up. Every single bit of it. Stocks, oil, gold, Treasuries, bunds. All of it. UK equities have rallied an astounding 10% since Tuesday. And why not? It’s not like they just voted to leave the EU. There…
Is the Panic Over?
A strong 3 day rally takes the S&P back to nearly pre-Brexit levels. Is the panic over? Well, let's go back and look at some other past events in recent stock market history. Also, we will look at a few fractal charts to determine some possible trade entries.
ECB To Loosen Rules On QE In Bid To Keep The Kool-Aid Flowing
The British pound wasn’t the only thing stirring in FX markets on Thursday. Have a look at the EUR: Ok, so we know what happened at 11 am ET. As we detailed earlier, that was Bank of England governor Mark Carney telling everyone what they already knew - policy easing from the BoE is on…