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MemeMoney: With bad ‘red flag’ jokes everywhere, most meme-stock traders are only seeing green

Wednesday was a good day for the OG memes, and a bad day for zero-commission trading apps trying to act cool on Twitter......»»

Category: topSource: marketwatchOct 13th, 2021

Rent The Runway (RENT): The New Normal For Designer Fashion

Rent The Runway's niche digital-fueled subscription platform is driving the next-generation of consumer fashion and RENT is lining up as a buy. The world economy is reemerging from the depths of the pandemic with a digitalized ambition like we've never seen before as we enter the 4th Industrial Revolution.Social gatherings/events are back in action, and attendees are looking to reemerge from their lockdown holes with a diverse fashionable impression that Rent The Runway's RENT niche digital offering can deliver. This subscription-based platform provides women with a wide assortment of the latest designer fashions, which can be "rented" for upcoming events.With a slew of holiday celebrations and post-COVID social outings on the horizon, RENT is poised to explode as society enters a digitally-inclined new normal.Rent The Runway (RENT) immediately plunged from its IPO price last month, and continues to slump (now trading 30% below its $23 IPO price), creating an excellent opportunity for us to get in on this nascent digital retail niche of the future before it takes flight. Several leading analysts released very bullish initiation of coverage reports on RENT in the past 48 hours, with price targets ranging from $20 to $28 (representing an upside of 25% to 75%). Every covering analyst is calling the stock a buy today.This signal of confidence from some of the most trusted sell-side analysts should supply this stock with the green light it needs for deep-pocket money managers to start buying this still small-cap equity.Most fund managers didn't initially understand this budding trend in feminine fashion, and the COVID-related subscription drop-off from a growth-oriented tech company is a red flag to those who don't recognize the value proposition of this next-generation retail platform offers.RENT will be releasing its first earnings report as a public company after the bell on Wednesday December 8th, which should generate a nice slingshot price action if RENT reveals the continued margin enhancing subscription growth narrative that its exhibited in the wake of the pandemic’s lockdown trough.Rent The Runway is coming out of this pandemic with margin expanding operational improvements and customer loyalty that it hadn't been able to achieve prior. Active subscribers nearly doubled in the first half of 2021 to 97,614 as of the end of July, still shy of the 133,576 it had pre-pandemic. However, with operating margins now toeing profitability and evident growth acceleration, RENT is a steal at the 5x forward price-to-sales it's trading at.It's time to invest in the new normal. RENT is perfectly positioned for society's digitally inclined revival, and its under-the-radar profile makes this growth-oriented stock a value play today.Happy Trading!DanFor more headline-fueled trades and insight, checkout my daily market commentary of the Headline Trader portfolio. Zacks' Top Picks to Cash in on Artificial Intelligence In 2021, this world-changing technology is projected to generate $327.5 billion in revenue. Now Shark Tank star and billionaire investor Mark Cuban says AI will create "the world's first trillionaires." Zacks' urgent special report reveals 3 AI picks investors need to know about today.See 3 Artificial Intelligence Stocks With Extreme Upside Potential>>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Rent the Runway, Inc. (RENT): Get Free Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksNov 23rd, 2021

Regal Cinemas will take cryptocurrencies as payment, following the lead of meme-stock favorite AMC

Customers can now pay for popcorn and tickets in digital currencies like bitcoin and ethereum, along with digital tokens like Basic Attention Token. Regal movie theater.Shutterstock Regal Cinemas is now accepting cryptocurrencies as payment for movie tickets and popcorn. The company will accept dozens of forms of digital payments, including bitcoin, ethereum, litecoin, and dogecoin. The theater chain is following AMC, which made a similar announcement earlier this month. Movie-theater chain Regal Cinemas is the latest to add cryptocurrencies as a form payment.The company, which has more than 500 theaters, will accept dozens of digital payments — including bitcoin, ethereum, litecoin, dogecoin, USD Coin and Basic Attention Token, among others — through the Flexa network, Regal said in a Tuesday statement. Regal is following the lead of its competitor AMC. Earlier this month, the meme-stock theater chain announced moviegoers could pay online in cryptocurrencies bitcoin, ether, bitcoin cash, and litecoin, adding that dogecoin, and potentially shiba inu, would be next.AMC Chief Executive Officer Adam Aron has capitalized on the large base of retail traders invested in the company and has hyped up crypto payments on Twitter.In Regal's statement, Chief Marketing Officer Ken Thewes said, "This exciting partnership enables us to easily and seamlessly accept digital currencies – including dogecoin, stablecoins and bitcoin – across our theatre footprint in a simple and completely contactless way, providing our guests with the flexibility and safety they deserve as we embark on a new era." Other brick-and-mortar chains, including Whole Foods, Crate and Barrel, and Nordstrom, have already added bitcoin as a payment method, Fortune reported previously. This year cryptocurrencies have widely moved from the edges of the finance world to the mainstream. Bitcoin, for its part, has been on a wild ride, reaching multiple new highs as retail traders and crypto whales buy into digital assets. On Tuesday, it traded at $57,421.09 at 2:36 p.m. in New York, according to Coinbase data. Read the original article on Business Insider.....»»

Category: topSource: businessinsiderNov 23rd, 2021

Avoid politics at Thanksgiving and talk about markets instead. Here"s a refresher on the craziest stories this year, from meme stocks to NFTs.

The year began with GameStop shares soaring and is ending with an internet group trying to buy the US Constitution. The Thanksgiving turkey.Hiroko Masuike/Getty Images Markets have been on a wild ride in 2021 amid new phenomena like meme stocks, NFTs, and DAOs. The year began with shares of GameStop soaring and is ending with a DAO trying to buy the US Constitution. Here are 10 conversation starters about markets to avoid politics at Thanksgiving this year. Forget politics at your Thanksgiving dinner this year. Talk markets.Think about everything that happened this year, starting with an army of retail traders causing GameStop shares to spike, to cute Japanese puppies becoming the mascots for a crypto revolution, and ending in a bunch of internet friends trying to buy the US Constitution. So here's a refresher of what happened with 10 possible ideas to get the conversation going on Thanksgiving.1) What's your favorite meme stock?Meme stocks became the first big market event this year when an army of retail traders mobilized on Reddit to drive up the prices of cheap stocks like GameStop, AMC, and BlackBerry. Then well-known trading app Robinhood halted the buying of meme stocks, initiating an uproar from traders, a Congressional hearing and a regulatory report. The meme-stock phenomenon has continued throughout the year, with new companies constantly added to the basket. For some, AMC is still their favorite. It's now accepting cryptocurrency as payment, and its CEO is a hit among retail traders.2) Want to see my NFT?Non-fungible tokens surged in popularity this year, and now the market as a whole is worth billions of dollars. The tokens are generally digital pieces of art tied to the blockchain. They're worth anywhere from a handful of dollars to millions of dollars. If you're really a crypto enthusiast, you might even bring your tungsten cube to Thanksgiving dinner. The cubes have become all the rage in the crypto world for their small size and surprising density. Shiba inu dog.Yuki Cheung/EyeEm/Getty3) I've been thinking about buying a shiba inu! (The puppy not the coin; I already have that).Demand for the Japanese hunting dogs has surged this year along with the price of meme coins like dogecoin and shiba inu coin. The cryptocurrencies, whose mascot is the shiba inu, have garnered the attention of the retail investing crowd, in addition to Tesla CEO Elon Musk and AMC CEO Adam Aron. Another shiba inu-based coin called Floki, a reference to Musk's new Japanese pup, has also joined the space. Be careful if you want to buy in, though, the cryptocurrencies — and the dogs — can be volatile. 4) How's your home improvement project going with those crazy lumber prices?Inflation is at 30-year highs thanks to a bevy of factors like shortages, supply chain bottlenecks, and government stimulus checks, among others. The price of lumber, along with a lot of other costs, surged this year as first-time buyers joined the housing market and current homeowners made updates. More recently, lumber prices have since slumped from highs earlier in the year. 5) I ordered my PS5 forever ago. One wrong turn in the Suez Canal, and I'm stuck with what I've got.In March, the Ever Given cargo ship became lodged in the pivotal waterway, prompting memes and adding to supply chain problems. After about a week blocking the canal, a fleet of tugboats and a dredger successfully freed the vessel. 6) Have you seen my Facebook — ahem, the company formerly known as Facebook — posts lately?Facebook is no longer Facebook. In October, it rebranded to Meta as it plans to move into virtual reality and the future of the internet that has been dubbed the metaverse. Since then, the concept of the metaverse has become mainstream. Elon Musk.Picture Alliance/Getty Images7) Let's talk about voting! Did you vote yes or no on Elon Musk's poll to sell his Tesla shares?Musk posted a poll on Twitter on Nov. 6 asking if he should sell 10% of his stake in Tesla. The resounding answer was yes, and he's so far offloaded about $9 billion worth of shares. The Tesla chief's tweets have become increasingly influential this year, as his posts about digital assets, like dogecoin, bitcoin, and ethereum, have helped drive broad crypto rallies. On top of that, his own company has joined the $1 trillion club, and he's now the wealthiest man in the world.8) What did you think of Squid Game? The Netflix hit show that garnered more than 140 million viewers, according to Forbes, also inspired a cryptocurrency that soared in value in a matter of days in October. But it was a scam. The owners took their profits and the crypto went offline. 9) How much did you make off Trump's SPAC?Blank-check companies known as SPACs were once a little known way for companies to go public, but during the pandemic they became wildly popular. Former president Donald Trump used one called Digital World Acquisition Corp. to take his company, Trump Media & Technology Group, public. DWAC shares quickly became a meme and surged in value on the news.10) Can someone please explain to me what a DAO is?It's a decentralized autonomous organization, better yet, it's just a bunch of internet friends getting together to accomplish a goal. One DAO bought the secretive Wu-Tang Clan album once owned by infamous pharma bro Martin Shkreli. Another tried to purchase the Constitution but was outbid by Citadel Securities' Founder Ken Griffin. Now one is trying to buy an NBA team. Read the original article on Business Insider.....»»

Category: dealsSource: nytNov 23rd, 2021

These are the 10 talked about stocks on Reddit"s WallStreetBets

As traders look to replicate the success of WallStreetBets stocks, one data aggregator is compiling the most mentioned stocks on the subreddit. Photo illustration by Jakub Porzycki/NurPhoto via Getty ImagesReddit's WallStreetBets forum entered the mainstream during the January GameStop craze. Driving stocks like GameStop to AMC Entertainment, retail investors congregating on the subreddit are a force in the stock market.These are the 10 most popular stocks WallStreetBets is talking about right now.Following which stocks Reddit's WallStreetBets crowd is talking about this year has paid off, as several have gone through epic rallies and seen heightened volatility. From GameStop in January to AMC Entertainment in June, the more than 11 million-member forum has driven the conversation in so-called meme stocks that have exploded higher amid overwhelming demand from retail investors. The surge in stocks with shaky fundamentals has led to several hedge fund blowups that were caught on the opposite side of the trade betting against the company in question.GameStop's short-squeeze, in-part led by the WallStreetBets crowd, led to a more than 50% drawdown in multibillion-dollar hedge fund Melvin Capital. Meanwhile, the sharp rally in struggling movie theater chain AMC Entertainment caused billions of dollars in losses for short-sellers in May and June.As traders look to replicate the success of WallStreetBets stocks, one data aggregator is compiling the most mentioned stocks on Reddit's forum. These are the top 10 stocks Reddit's WallStreetBets forum is focused on right now, according to data compiled by SwaggyStocks. The list is based on mentions over the past 24 hours and financial data is sourced from Koyfin. 10. ContextLogicTicker: WISHWallStreetBet Mentions Over Past 24 Hours: 156Market Capitalization: $2.7 billionOne-Week Performance: -19.6% Wish9. DisneyTicker: DISWallStreetBet Mentions Over Past 24 Hours: 167Market Capitalization: $283.0 billionOne-Week Performance: -5.0% “Shang-Chi” and “Jungle Cruise" will become available for all subscribers to stream on Disney Plus Day.Disney Plus8. PalantirTicker: PLTRWallStreetBet Mentions Over Past 24 Hours: 213Market Capitalization: $41.6 billionOne-Week Performance: -12.1%Palantir HQ.Picture Alliance/Getty Images7. MicronTicker: MUWallStreetBet Mentions Over Past 24 Hours: 282Market Capitalization: $87.0 billionOne-Week Performance: 10.8% Micron Technology HQ in Boise, Idaho.Micron Technology6. AppleTicker: AAPLWallStreetBet Mentions Over Past 24 Hours: 306Market Capitalization: $2.60 trillionOne-Week Performance: 5.9% An Apple store.Spencer Platt/Getty Images5. PayPalTicker: PYPLWallStreetBet Mentions Over Past 24 Hours: 356Market Capitalization: $230.5 billionOne-Week Performance: -13.7%SOPA Images / Contributor/Getty Images4. NvidiaTicker: NVDAWallStreetBet Mentions Over Past 24 Hours: 381Market Capitalization: $767.2 billionOne-Week Performance: 3.9% Nvidia headquarters in Santa Clara, CaliforniaJustin Sullivan/Getty Images3. TeslaTicker: TSLAWallStreetBet Mentions Over Past 24 Hours: 449Market Capitalization: $1.11 trillionOne-Week Performance: 7.9% Associated Press2. GameStopTicker: GMEWallStreetBet Mentions Over Past 24 Hours: 532Market Capitalization: $17.4 billionOne-Week Performance: 14.1% VIEW press/Getty Images1. Zoom VideoTicker: ZMWallStreetBet Mentions Over Past 24 Hours: 873Market Capitalization: $73.3 billionOne-Week Performance: -24.0% Zoom benefited massively from the coronavirus pandemic.NurPhoto/Getty ImagesRead the original article on Business Insider.....»»

Category: topSource: businessinsiderNov 23rd, 2021

Futures Under Water As Tech Selloff Spreads, Yields Spike, Lira Implodes

Futures Under Water As Tech Selloff Spreads, Yields Spike, Lira Implodes US equity futures continued their selloff for the second day as Treasury yields spiked to 1.66%, up almost 4bps on the day, and as the selloff in tech shares spread as traders trimmed bets for a dovish-for-longer Federal Reserve after the renomination of Jerome Powell as its chair. At 8:00am ET, S&P futures were down 2.75 points or -0.05%, with Dow futures flat and Nasdaq futures extended their selloff but were off worst levels, down 41.25 points or 0.25%, after Monday’s last-hour furious rout in technology stocks. As repeatedly covered here in recent weeks, the Turkish currency crisis deepened with the lira weakening past 13 per USD, a drop of more than 10% in one day.  Oil rebounded - as expected - after a panicking Joe Biden, terrified about what soaring gas prices mean for Dems midterm changes, announced that the US, together with several other countries such as China, India and Japan, would tap up to 50 million barrels in strategic reserves, a move which was fully priced in and will now serve to bottom tick the price of oil. In premarket trading, Zoom lost 9% in premarket trading on slowing growth. For some unknown reason, investors have been reducing expectations for a deeper dovish stance by the Fed after Powell was selected for a second term (as if Powell - the man who started purchases of corporate bonds - is somehow hawkish). The chair himself sought to strike a balance in his policy approach saying the central bank would use tools at its disposal to support the economy as well as to prevent inflation from becoming entrenched. “While investors no longer have to wonder about who will be leading the Federal Reserve for the next few years, the next big dilemma the central bank faces is how to normalize monetary policy without upsetting markets,” wrote Robert Schein, chief investment officer at Blanke Schein Wealth Management. Following Powell’s renomination, “the market has unwound hedges against a more ‘dovish’ personnel shift,” Chris Weston, head of research with Pepperstone Financial Pty Ltd., wrote in a note. Not helping was Atlanta Fed President Raphael Bostic who said Monday that the Fed may need to speed up the removal of monetary stimulus and allow for an earlier-than-planned increase in interest rates European stocks dropped with market focusing on potential Covid lockdowns and policy tightening over solid PMI data. Euro Stoxx 50 shed as much as 1.7% with tech, financial services and industrial names the hardest hit. Better-than-forecast PMI numbers out of Europe’s major economies prompted money markets to resume bets that the ECB will hike the deposit rate 10 basis points as soon as December 2022, versus 2023 on Monday. As Goldman notes, the Euro area composite flash PMI increased by 1.6pt to 55.8 in November — strongly ahead of consensus expectations — in a first gain since the post-July moderation. The area-wide gain was broad-based across countries, and sectors. Supply-side issues continued to be widely reported, with input and output price pressures climbing to all-time highs. In the UK, the November flash composite PMI came in broadly as expected, and while input costs rose to a new all-time high, pass-through into output prices appears lower than usual. Forward-looking expectations remain comfortably above historical averages across Europe, although today's data are unlikely to fully reflect the covid containment measures taken in a number of European countries over recent days. Key numbers (the responses were collected between 10 and 19 November (except in the UK, where the survey response window spanned 12-19 November). Euro Area Composite PMI (Nov, Flash): 55.8, GS 53.6, consensus 53.0, last 54.2. Euro Area Manufacturing PMI (Nov, Flash): 58.6, GS 57.7, consensus 57.4, last 58.3. Euro Area Services PMI (Nov, Flash): 56.6, GS 53.9, consensus 53.5, last 54.6. Germany Composite PMI (Nov, Flash): 52.8, GS 52.1, consensus 51.0, last 52.0. France Composite PMI (Nov, Flash): 56.3, GS 54.4, consensus 53.9, last 54.7. UK Composite PMI (Nov, Flash): 57.7, GS 57.7, consensus 57.5, last 57.8. And visually: Earlier in the session, Asian stocks fell toward a three-week low as Jerome Powell’s renomination to head the Federal Reserve boosted U.S. yields, putting downward pressure on the region’s technology shares. The MSCI Asia Pacific Index declined as much as 0.5%, as the reappointment sent Treasury yields higher and buoyed the dollar amid concerns monetary stimulus will be withdrawn faster. Consumer discretionary and communication shares were the biggest drags on Asia’s benchmark, with Tencent and Alibaba slipping on worries over tighter regulations in China. “Powell’s renomination was generally expected by the market,” said Chetan Seth, an Asia-Pacific equity strategist at Nomura. The market’s reaction may be short-lived as traders turn their attention to the Fed’s meeting in December and Covid’s resurgence in Europe, he added. Asia shares have struggled to break higher as the jump in yields weighed on sentiment already damped by a lackluster earnings season and the risk of accelerating inflation. The region’s stock benchmark is down about 1% this year compared with a 16% advance in the MSCI AC World Index. Hong Kong and Taiwan were among the biggest decliners, while Australian and Indian shares bucked the downtrend, helped by miners and energy stocks. India’s benchmark stock index rose, snapping four sessions of declines, boosted by gains in Reliance Industries Ltd.   The S&P BSE Sensex climbed 0.3% to close at 58,664.33 in Mumbai, recovering after falling as much as 1.3% earlier in the session. The NSE Nifty 50 Index gained 0.5%. Of the 30 shares on the Sensex, 21 rose and 9 fell. All but one of the 19 sector sub-indexes compiled by BSE Ltd. advanced, led by a gauge of metal stocks.  Reliance Industries Ltd. gained 0.9%, after dropping the most in nearly 10 months on Monday following its decision to scrap a plan to sell a 20% stake in its oil-to-chemicals unit to Saudi Arabian Oil Co. Shares of One 97 Communications Ltd., the parent company for digital payments firm Paytm, climbed 9.9% after two days of relentless selling since its trading debut. In rates, Treasuries dropped, with the two-year rate jumping five basis points, helping to flatten the yield curve. Bunds and Treasuries bear steepened with German 10y yields ~5bps cheaper. Gilts bear flatten, cheapening 1.5bps across the short end. 10Y TSY yields rose as high as 1.67% before reversing some of the move. In FX, the Bloomberg Dollar Spot Index was little changed after earlier advancing to the highest level since September 2020 as markets moved to price in a full quarter-point rate hike by the June Fed meeting, with a good chance of two more by year-end; Treasury yields inched up across the curve apart from the front end. The Japanese yen briefly fell past 115 per dollar for the first time since 2017. The euro advanced after better-than-forecast PMI numbers out of Europe’s major economies prompted money markets to resume bets that the ECB will hike the deposit rate 10 basis points as soon as December 2022, versus 2023 on Monday. Sterling declined versus the dollar and the euro; traders are taking an increasingly negative view on the pound, betting that the decline that’s already left the currency near its lowest this year has further to run New Zealand’s dollar under-performed all G-10 peers as leveraged longs backing a 50 basis-point hike from the central bank were flushed out of the market; sales were mainly seen against the greenback and Aussie. The yuan approached its strongest level against trade partners’ currencies in a sign that traders see a low likelihood of aggressive official intervention. The Turkish lira (see above) crashed to a record low on Tuesday, soaring more than 10% and just shy of 14 vs the USD, a day after President Recep Tayyip Erdogan defended his pursuit of lower interest rates to boost economic growth and job creation. In commodities, crude futures rebounded sharply after Biden announced a coordinated, global SPR release which would see the US exchange up to 32mm barrels, or a negligible amount. Brent spiked back over $80 on the news after trading in the mid-$78s. Spot gold drops ~$8, pushing back below $1,800/oz. Base metals are well supported with LME nickel outperforming. Looking at the day ahead, the main data highlight will be the flash PMIs for November from around the world, and there’s also the Richmond Fed manufacturing index for November. Finally from central banks, we’ll hear from BoE Governor Bailey, Deputy Governor Cunliffe and the BoE’s Haskel, as well as ECB Vice President de Guindos and the ECB’s Makhlouf. Market Snapshot S&P 500 futures down 0.3% to 4,667.75 Brent Futures down 0.9% to $78.95/bbl Gold spot down 0.4% to $1,796.86 U.S. Dollar Index down 0.17% to 96.39     Top Overnight News from Bloomberg The volatility term structures in the major currencies show that next month’s meetings by monetary policy authorities are what matters most. Data galore out of the U.S. by Wednesday’s New York cut off means demand for one-day structures remains intact, yet it’s not enough to bring about term structure inversion as one-week implieds stay below recent cycle highs Lael Brainard, picked to be vice chair of the Federal Reserve, is expected to be a critical defender of its commitment to maximum employment across demographic groups at a time when other U.S. central bankers are more worried by inflation ECB Executive Board member Isabel Schnabel said there’s an increasing threat of inflation taking hold, as she played down the danger that resurgent coronavirus infections might impede the euro zone’s recovery Regarding latest pandemic restrictions, “when it comes to the impact, I would say that while it will surely have a moderating impact on economic activity, the impact on inflation will actually be more ambiguous because it might also reinforce some of the concerns we have around supply bottlenecks,” ECB Governing Council member Klaas Knot says in Bloomberg Television interview with Francine Lacqua European Union countries are pushing for an agreement on how long Covid-19 vaccinations protect people and how to manage booster shots as they try to counter the pandemic’s fourth wave and safeguard free travel Germany’s top health official reiterated a warning that the government can’t exclude any measures, including another lockdown, as it tries to check the latest wave of Covid-19 infections The State Council, China’s cabinet, released three documents in the past several days, outlining measures to help small and medium-sized enterprises weather the downturn: from encouraging local governments to roll out discounts for power usage to organizing internet companies to provide cloud and digital services to SMEs A more detailed look at global markets courtesy of Newsquawk Asia-Pac stocks traded mixed following a similar performance in the US where participants digested President Biden’s decision to nominate Fed Chair Powell for a second term and Fed’s Brainard for the Vice Chair role. This resulted in bear flattening for the US curve and underpinned the greenback, while the major indices were choppy but with late selling heading into the close in which the S&P 500 slipped beneath the 4,700 level and the Nasdaq underperformed as tech suffered the brunt of the higher yields. ASX 200 (+0.8%) was positive with sentiment encouraged after stronger PMI data and M&A developments including BHP’s signing of a binding agreement to merge its oil and gas portfolio with Woodside Petroleum to create a global top 10 independent energy company and the largest listed energy company in Australia, which spurred outperformance for the mining and energy related sectors. KOSPI (-0.5%) was lacklustre and retreated below the 3k level amid broad weakness in tech which was not helped by concerns that South Korea could take another aim at large tech through a platform bill and with the government said to be mulling strengthening social distancing measures. Hang Seng (-1.2%) and Shanghai Comp. (+0.2%) continued to diverge amid a neutral liquidity effort by the PBoC and with the Hong Kong benchmark conforming to the tech woes, while the mainland was kept afloat after the State Council pledged to strengthen assistance to smaller firms and with Global Times noting that China will likely adopt another RRR cut before year-end to cope with an economic slowdown. Finally, Japanese participants were absent from the market as they observed Labor Thanksgiving Day, while yields in Australia were higher as they tracked global counterparts and following a Treasury Indexed bond offering in the long-end. Top Asian News Tiger Global Leads $210 Million Round by India Proptech Unicorn China’s Slowdown Tests Central Bank Amid Debate Over Easing Kuaishou Defies China Crackdown as Revenue Climbs 33% Evergrande Shares Jump in Afternoon Trading as Group Units Rally Major bourses in Europe are lower across the board, but off worst levels (Euro Stoxx 50 -1.1%; Stoxx 600 -1.3%) following on from the mixed APAC performance, but with pandemic restrictions casting a shower over the region. US equity futures are mostly lower but to a lesser extent than European peers, with the YM (+0.1%) the relative outperformer vs the ES (-0.1%), NQ (-0.3%) and RTY (-0.8%). Back to Europe, the morning saw the release of Flash PMIs which failed to spur much action across market given the somewhat stale nature against the backdrop of a worsening COVID situation in Europe. Losses in the UK’s FTSE 100 (-0.1%) are more cushioned vs European counterparts, with heavyweight miners doing the heavy lifting, and as the basic resources sector outpaces and resides as the only sector in the green at the time of writing amid a surge in iron ore prices overnight. Sticking with sectors, there is no clear or overarching theme/bias. Tech resides at the foot of the pile, unaided by the intraday rise in yields. Travel and Leisure also reside towards the bottom of the bunch, but more a function of the “leisure” sub-sector as opposed to the “travel” component, with Evolution Gaming (-3.7%) and Flutter (-3.5%) on the back foot. In terms of individual movers, Thyssenkrupp (-7.0%) tumbles after the Co. announced a secondary offer by Cevian of 43mln shares. Meanwhile, Telecom Italia (-3%) is softer following yesterday’s run, whilst Vivendi (-0.5%) said the current KKR (KKR) offer does not reflect Telecom Italia's value and it has no intention of offloading its 24% stake. Top European News U.K. PMIs Show Record Inflation and ‘Green Light’ for BOE Hike Kremlin Says New U.S. Sanctions on Nord Stream 2 Are ‘Illegal’ ECB’s Knot Says New Lockdowns Won’t Delay Wind-Down of Stimulus Telefonica Drops, Berenberg Cuts on Spain Margin Problems In FX, the Buck had already eased off best levels to relieve some pressure from its rivals, but the Euro also derived encouragement from the fact that a key long term Fib held (just) at 1.1225 before getting a rather unexpected fundamental fillip in the form of stronger than forecast flash Eurozone PMIs plus hawkish-sounding comments from ECB’s Schnabel. Eur/Usd duly rebounded to 1.1275 and the Dollar index retreated to 96.308 from a fresh y-t-d peak of 96.603, while the Yen and Franc also took advantage to varying degrees against the backdrop of deteriorating risk sentiment and in thinner trading volumes for the former due to Japan’s Labor Day Thanksgiving holiday. Usd/Jpy recoiled from 115.15 to 114.49 at one stage and Usd/Chf to 0.9301 from 0.9335 before both pairs bounced with the Greenback and a rebound in US Treasury yields ahead of Markit’s preliminary PMIs and Usd 59 bn 7 year note supply. TRY - Simply no respite for the Lira via another marked pull-back in oil prices on heightened prospects of SPR taps, the aforementioned Buck breather or even a decent correction as Usd/Try extended its meteoric rise beyond 11.5000 and 12.0000 towards 12.5000 irrespective of an ally of Turkish President Erdogan urging a debate on CBRT independence. Instead, the run and capital flight continues as talks with the IMF make no progress and an EU court condemns the country for detaining 400+ judges after the coup, while the President rules out a snap election after recent calls for an earlier vote than the scheduled one in 2023 by the main opposition party. NZD/CAD/GBP/AUD - It remains to be seen whether the RBNZ maintains a 25 bp pace of OCR normalisation overnight, but weak NZ retail activity in Q3 may be a telling factor and is applying more downside pressure on the Kiwi across the board, as Nzd/Usd hovers under 0.6950 and the Aud/Nzd cross tests 1.0425 on relative Aussie strength or resilience gleaned from another spike in iron ore that is helping to keep Aud/Usd above 0.7200. Conversely, the latest downturn in crude is undermining the Loonie and the Pound hardly derived any traction from better than anticipated UK PMIs even though they should provide the BoE more justification to hike rates next month. Usd/Cad has now breached 1.2700 and only stopped a few pips short of 1.2750 before fading ahead of comments from BoC’s Beaudry, while Cable topped out just over 1.3400 awaiting BoE Governor Bailey, whilst Haskel reaffirmed his stance in the transitory inflation camp, although suggested that if the labour market remains tight the Bank Rate will have to rise. SCANDI/EM - Hardly a shock that Brent’s reversal has hit the Nok alongside broader risk-aversion that is also keeping the Sek defensive in advance of the Riksbank, but the Zar is coping well considering Gold’s loss of Usd 1800+/oz status and test of chart support at the 100 DMA only a couple of Bucks off the 200. Similarly, the Cnh and Cny are still resisting general Usd strength and other negatives, with help from China’s State Council pledging to strengthen assistance to smaller firms perhaps. In commodities, WTI and Brent Jan'22 futures remain under pressure with the former back under USD 76/bbl (vs USD 76.59/bbl high) and the latter around USD 79/bbl (vs USD 79.63/bbl high). The WTI contract is also narrowly lagging Brent by some USD 0.30/bbl at the time of writing. Participants are keeping their eyes peeled for reserve releases from the US, potentially in coordination with other nations including China, Japan, and India – with inflation concerns being the common denominator. The move also comes in reaction to OPEC+ flouting calls by large oil consumers, particularly the US, to further open the taps beyond the group’s planned 400k BPD/m hikes. A source cited by Politico caveated that a final decision is yet to be made, and US officials are hoping that the threat of an SPR release would persuade OPEC+ to double their quotas at the Dec 2nd meeting. As it stands, Energy Intel journalist Bakr noted that she has not heard anything from OPEC+ officials about changing production plans, but delegates yesterday suggested that plans may be tweaked. Click here for the full Newsquawk analysis piece. Aside from this, US President Biden is also poised to give a speech on the economy, whilst the weekly Private Inventories will also be released today. Elsewhere, spot gold and have been drifting lower in what is seemingly a function of technical, with the yellow metal dipping under USD 1,800/oz from a USD 1,812/oz current high, with a cluster of DMAs present to the downside including the 100 DMA (around USD 1,793/oz), 200 DMA (around USD 1,791/oz) and 50 DMA (around USD 1,789/oz). Turning to base metals, LME copper holds a positive bias with prices on either side of USD 9,750/t, whilst Dalian iron ore surged overnight - with reports suggesting that steel de-stockpiling accelerated last week, and analysts suggesting that the market is betting on steelmakers in December. US Event Calendar 9:45am: Nov. Markit US Composite PMI, prior 57.6 9:45am: Nov. Markit US Services PMI, est. 59.0, prior 58.7 9:45am: Nov. Markit US Manufacturing PMI, est. 59.1, prior 58.4 10am: Nov. Richmond Fed Index, est. 11, prior 12 DB's Jim Reid concludes the overnight wrap A reminder that yesterday we published our 2022 credit strategy outlook. See here for the full report. Craig has also put out a more detailed HY 2022 strategy document here and Karthik a more detail IG equivalent here. Basically we think spreads will widen as much as 30-40bps in IG and 120-160bps in HY due to a response to a more dramatic appreciation of the Fed being well behind the curve. This sort of move is consistent with typical mid-cycle ranges through history. We do expect this to mostly retrace in H2 as markets recover from the shock and growth remains decent and liquidity still high. We also published the results of our ESG issuer and investor survey where around 530 responded. Please see the results here. Today is the start of a new adventure as I’m doing my first overseas business trip in 20 months. It took me a stressful 2 hours last night to find and fill in various forms, download various apps and figure out how on earth I travel in this new world. Hopefully I’ve got it all correct or I’ll be turned back at the Eurostar gates! The interesting thing about not travelling is that I’ve filled the time doing other work stuff so productivity will suffer. So if I can do a CoTD today it’ll be done on an iPhone whilst racing through the French countryside. Actually finishing this off very early in a long taxi ride on the way to the train reminds me of how car sick I get working on my iPhone! The delights of travel are all coming flooding back. After much anticipation over recent weeks, we finally heard yesterday that President Biden would be nominating Fed Chair Powell for another four-year term at the helm of the central bank. In some ways the decision had been widely expected, and Powell was the favourite in prediction markets all along over recent months. But the Fed’s staff trading issues and reports that Governor Brainard was also being considered had led many to downgrade Powell’s chances, so there was an element of uncertainty going into the decision, even if any policy differences between the two were fairly marginal. In the end however, Biden opted for continuity at the top, with Brainard tapped to become Vice Chair instead. Powell’s nomination will require senate confirmation once again, but this isn’t expected to be an issue, not least with Powell having been confirmed in an 84-13 vote last time around. Further, Senate Banking Committee Chair Brown, viewed as a progressive himself, noted last week there should be no issue confirming Powell despite rumblings from progressive lawmakers. More important to watch out for will be who Biden selects for the remaining positions on the Fed Board of Governors, where there are still 3 vacant seats left to fill, including the position of Vice Chair for Supervision. In a statement released by the White House, it said that Biden intended to make those “beginning in early December”, so even with Powell staying on, there’s actually a reasonable amount of scope for Biden to re-shape the Fed’s leadership. A potential hint about who may be considered, President Biden noted his next appointments will “bring new diversity to the Fed.” President Biden, flanked by Powell and Brainard, held a press conference following the announcement. He noted maintaining the Fed’s independence and leadership stability informed his decision, and that Chair Powell assured the President he would focus on fighting inflation. He was apparently also assured that the Chair would work to combat climate change, perhaps an olive branch to those in his party that wanted a more progressive nominee. Powell and Brainard both followed up with remarks of their own, but didn’t stray from the recent Fed party line. In response to the decision, investors moved to bring forward their timing of the initial rate hike from the Fed, with one now just about priced by the time of their June 2022 meeting, whilst the dollar index (+0.54%) strengthened to a fresh one-year high. This reflects the perception among many investors that Brainard was someone who’d have taken the Fed on a more dovish trajectory. Inflation breakevens fell across the curve as well in response. Indeed the 4-year breakeven, which roughly coincides with the term of the next Fed chair, was down -3.8bps after yesterday’s session, with the bulk of that dive coming immediately after the confirmation of Powell’s nomination. Nevertheless, that decline in breakevens was more than outweighed by a shift higher in real rates that sent nominal yields noticeably higher. By the close, yields on 2yr (+7.8bps) and 5yr (+9.5bps) Treasuries were at their highest levels since the pandemic began, and those on 10yr Treasuries were also up +7.7bps, ending the session at 1.62%. 2yr yields were a full 14.1bps higher than the intra-day lows on Friday after the Austria lockdown news. We had similar bond moves in Europe too, with yields on 10yr bunds (+4.0bps) moving higher throughout the session thanks to a shift in real rates. Another noticeable feature in the US was the latest round of curve flattening, with the 5s30s (-4.4bps) reaching its flattest level (+64.1bps) since the initial market panic over Covid-19 back in March 2020. The S&P 500 took a sharp turn heading into the New York close after trading in positive territory for most of the day, ultimately closing down -0.32%. Sector performance was mixed, energy (+1.81%) and financials (+1.43%) were notable outperformers on climbing oil prices and yields, while big tech companies across different sectors were hit by higher discount rates. The NASDAQ (-1.26%) ended the day lower, having pared back its initial gains that earlier put it on track to reach a record of its own. The other main piece of news yesterday came on the energy front, where it’s been reported that we could have an announcement as soon as today about a release of oil from the US Strategic Petroleum Reserve, potentially as part of a joint announcement with other nations. Oil prices were fairly resilient to the news, with Brent crude (+1.03%) and WTI (+0.85%) still moving higher, although both are down from their recent peaks as speculation of such a move has mounted. This could help put some downward pressure on inflation, but as recent releases have shown, price gains have been broadening out over the last couple of months to a wider swathe of categories, so it remains to be seen how helpful this will prove, and will obviously depend on how much is released along with how the OPEC+ group react. For their part, OPEC+ members noted that the moves from the US and its allies would force them to reconsider their production plans at their meeting next week. Looking ahead now, one of the main highlights today will come from the release of the flash PMIs for November, which will give us an initial indication of how the global economy has fared into the month. As mentioned yesterday, the Euro Area PMIs have been decelerating since the summer, so keep an eye out for how they’re being affected by the latest Covid wave. It’ll also be worth noting what’s happening to price pressures, particularly with inflation running at more than double the ECB’s target right now. Overnight in Asia stocks are trading mixed with Shanghai Composite (+0.43%), CSI (+0.20%), KOSPI (-0.44%) and Hang Seng (-1.01%) diverging, while the Nikkei is closed for Labor Thanksgiving. The flash manufacturing PMI release from Australia (58.5 vs 58.2 previous) came in close to last month while both the composite (55 vs 52.1 previous) and services (55 vs 51.8 previous) accelerated. In Japan the Yen slid past an important level of 115 against the Dollar for the first time in four years after Powell was confirmed. This marks an overall slide of 10% this year making it the worst performer amongst advanced economy currencies. S&P 500 (-0.01%) and DAX futures (-0.31%) are flat to down with Europe seemingly catching up with the weak U.S. close. Before this, in Europe yesterday, equities continued to be subdued, with the STOXX 600 down -0.13% after trading in a tight range, as the continent reacted to another surge in Covid-19 cases. The move by Austria back into lockdown has raised questions as to where might be next, and Bloomberg reported that Chancellor Merkel told CDU officials yesterday that the recent surge was worse than anything seen so far, and that additional restrictions would be required. So the direction of travel all appears to be one way for the time being in terms of European restrictions, and even a number of less-affected countries are still seeing cases move in an upward direction, including France, Italy and the UK. So a key one to watch that’ll have big implications for economies and markets too. Staying on Germany, there was some interesting news on a potential coalition yesterday, with Bloomberg obtaining a preliminary list of cabinet positions that said that FDP leader Christian Lindner would become finance minister, and Green co-leader Robert Habeck would become a “super minister” with responsibility for the economy, climate protection and the energy transition. The report also said that both would become Vice Chancellors, whilst the Greens’ Annalena Baerbock would become foreign minister. It’s worth noting that’s still a preliminary list, and the coalition agreement is yet to be finalised, but it has been widely suggested that the parties are looking to reach a conclusion to the talks this week, so we could hear some more info on this relatively soon. There wasn’t much in the way of data yesterday, though the European Commission’s advance November consumer confidence reading for the Euro Area fell back by more than expected to -6.8 (vs. -5.5 expected), which is the lowest it’s been since April. Over in the US, there was October data that was somewhat more positive however, with existing home sales rising to an annualised rate of 6.34m (vs. 6.20m expected), their highest level in 9 months. Furthermore, the Chicago Fed’s national activity index was up to 0.76 (vs. 0.10 expected). To the day ahead now, and the main data highlight will be the aforementioned flash PMIs for November from around the world, and there’s also the Richmond Fed manufacturing index for November. Finally from central banks, we’ll hear from BoE Governor Bailey, Deputy Governor Cunliffe and the BoE’s Haskel, as well as ECB Vice President de Guindos and the ECB’s Makhlouf. d Tyler Durden Tue, 11/23/2021 - 08:31.....»»

Category: blogSource: zerohedgeNov 23rd, 2021

AMC CEO Adam Aron has led insider sales at the theater chain as executives cash out $70 million in 2021

Aron sold $25 million worth of shares earlier this month in an effort to diversify his estate planning, he said. AMC CEO Adam Aron.REUTERS/Mario Anzuoni AMC insiders have cashed out on $70 million worth of shares in the company this year, led by CEO Adam Aron. Aron sold $25 million of AMC shares earlier this month in an effort to diversify his estate planning. AMC stock has risen nearly 2,000% this year thanks to bullish retail traders. AMC insiders have cashed out on $70 million worth of shares in the company this year, with Chief Executive Officer Adam Aron leading the sales. The sales, compiled and reported on by Bloomberg, have occurred amid AMC's epic 2,000% rally so far this year, powered by the meme-stock craze and the company's large base of retail investors.Though many of the sales were pre-planned, previous years have seen just a fraction of the amount of insiders selling shares, Bloomberg reported. AMC did not immediately respond to Insider's request for comment and declined to comment to Bloomberg. Amid the meme-stock craze, Aron has become known as a leader of the retail traders, who call themselves apes and fondly named him "Silverback," a top male gorilla.Still, Aron sold $25 million worth of shares earlier this month even while ensuring investors that he believed in the company. At the time, he told investors — most of whom are individuals — that he needed to diversify his assets for estate planning, considering 85% of his net worth was tied to AMC stock."I don't want any of you ever to think that I have anything but full confidence in AMC's future," he said in defense of the sale.Among the 14 other executives and board members who sold shares this year was Chief Financial Officer Sean Goodman. He dumped all of his shares, totaling $8.5 million, Bloomberg wrote, noting he has the chance to be awarded more AMC stock in the future.Other sellers include General Counsel Kevin Connor and Chief Marketing Officer Stephen Colanero, according to filings with the US Securities and Exchange Commission. Much of AMC's insider sales have been concentrated in March, June, and November, the filings show.AMC stock traded at $41.50 at 1:45 p.m. in New York. The company, which has neared bankruptcy in the past, has sought to reach out to its retail traders this year by accepting cryptocurrencies like dogecoin and creating a rewards program that offers investors perks like free popcorn.Read the original article on Business Insider.....»»

Category: topSource: businessinsiderNov 22nd, 2021

Futures Trade Near All Time High As Traders Shrug At Inflation, Covid Concerns

Futures Trade Near All Time High As Traders Shrug At Inflation, Covid Concerns US equity futures and European markets started the Thanksgiving week on an upbeat note as investors set aside fear of surging inflation and focused on a pickup in M&A activity while China signaled possible easing measures. The euphoria which lifted S&P futures up some 0.5% overnight and just shy of all time highs ended abruptly and futures reversed after German Chancellor Angela Merkel said the Covid situation in the country is worse than anything so far and tighter curbs are needed. At 730 a.m. ET, Dow e-minis were up 95 points, or 0.26%. S&P 500 e-minis were up 12.25 points, or 0.26% and Nasdaq 100 e-minis were up 58.75 points, or 0.357%. U.S. stocks trade near record levels, outpacing the rest of the world, as investors see few alternatives amid rising inflation and a persistent pandemic that undermines global recovery. Concerns about high valuations and the potential for the economy to run too hot on the back of loose monetary and fiscal policies have interrupted, but not stopped the rally. In other words, as Bloomberg puts it "bears are winning the argument, bulls are winning in the market" while Nasdaq futures hit another record high as demand for technology stocks remained strong. “Based on historical data, the Thanksgiving week is a strong week for U.S. equities,” Ipek Ozkardeskaya, a senior analyst at Swissquote, wrote in a note. “Black Friday sales will be closely watched. The good news is, people still have money to spend, even though they get less goods and services in exchange of what’s spent.” In premarket moves, heavyweights, including most FAANG majors, rose in premarket trade. Vonage Holdings Corp. jumped 26% in premarket trading after Ericsson agreed to buy it. Telecom Italia SpA jumped as much as 30% in Europe after KKR offered to buy it for $12 billion. Energy stocks recovered slightly from last week's losses, although anticipation of several economic readings this week kept gains in check. Bank stocks rose in premarket trading as the U.S. 10-year Treasury yield climbed for the first time in three sessions to about 1.58%. S&P 500 futures gain as much as 0.5% on Monday morning. Tesla gained 2.8% after Chief Executive Elon Musk tweeted that Model S Plaid will "probably" be coming to China around March. Activision Blizzard (ATVI.O) slipped 1.1% after a media report that the video game publisher's top boss, Bobby Kotick, would consider leaving if he cannot quickly fix culture problems. Travel and energy stocks, which were among the worst performers last week, also marked small gains before the open. Here is a list of the other notable premarket movers: Astra Space (ASTR US) shares surge 33% in premarket trading after the company said its rocket reached orbit. Aurora Innovation (AUR US) falls 8% in premarket, after soaring 71% last week amid a surge in popularity for self-driving technology companies among retail traders. Chinese electric-carmaker Xpeng (XPEV US) rises as much as 2.8% premarket after co. unveils a large sports-utility vehicle pitted more directly against Tesla’s Model Y and Nio’s ES series. Stocks of other EV makers are mixed. Monster Beverage (MNST US)., the maker of energy drinks, is exploring a combination with Corona brewer Constellation Brands (STZ US), according to people familiar with the matter. CASI Pharma (CASI US) jumped 17% in postmarket trading after CEO Wei-Wu He disclosed the purchase of 400,000 shares in a regulatory filing. Along with an eye on the Fed's plans for tightening policy, investors are also watching for an announcement from Joe Biden on his pick for the next Fed chair. Powell was supposed to make his decision by the weekend but has since delayed it repeatedly. Investors expect current chair Jerome Powell to stay on for another term, although Fed Governor Lael Brainard is also seen as a candidate for the position. “Bringing the most dovish of the doves wouldn’t guarantee a longer period of zero rates,” Ozkardeskaya wrote. “If the decisions are based on economic fundamentals, the economy is calling for a rate hike. And it’s calling for it quite soon.” The Stoxx 600 trimmed gains after German Chancellor Angela Merkel called for tighter Covid-19 restrictions. European telecom shares surged after KKR’s offer to buy Telecom Italia for about $12 billion, which boosted sentiment about M&A in the sector. The Stoxx 600 Telecommunications Index gained as much as 1.6%, the best-performing sector gauge for the region: Telefonica +4.8%, Infrastrutture Wireless Italiane +4%, KPN +2.7%. Meanwhile, telecom equipment stock Ericsson underperforms the rest of the SXKP index, falling as much as 4.9% after a deal to buy U.S. cloud communication provider Vonage; Danske Bank says the price is “quite steep”. Earlier in the session, Asian stocks fell as Covid-19 resurgences in Europe triggered risk-off sentiment across markets amid weaker oil prices, a strong U.S. dollar and higher bond yields. The MSCI Asia Pacific Index declined 0.3%, with India’s Sensex measure slumping the most since April as Paytm’s IPO weighed on sentiment. The country’s oil giant Reliance dragged down the Asian index after scrapping a deal with Saudi Aramco, and energy and financials were the biggest sector losers in the region. Asian markets have turned softer after capping their first weekly retreat this month, following lackluster moves from economically sensitive sectors in the U.S., while investors continue to monitor earnings reports of big Chinese technology firms this week. “Some impact from the regulatory risks and dull macroeconomic conditions have shown up in several Chinese big-tech earnings and that may put investors on the sidelines as earnings season continues,” Jun Rong Yeap, a market strategist at IG Asia Pte., wrote in a note. China’s equity gauge posted a second straight day of gains after the central bank’s quarterly report indicated a shift toward easing measures to bolster the economic recovery. South Korea led gains in the region, with the Kospi adding more than 1%, helped by chipmakers Samsung Electronics and SK Hynix. Asia’s chip-related shares rose after comments from Micron Technology CEO Sanjay Mehrotra added to optimism the global shortage of semiconductors is easing. Reports of Japan earmarking $6.8 billion to bolster domestic chipmaking and Samsung planning to announce the location of its new chip plant in the U.S. also aided sentiment. Japanese stocks fluctuated after U.S. shares retreated on Friday following hawkish remarks from Federal Reserve officials. The Topix index was virtually unchanged at 2,044.16 as of 2:21 p.m. Tokyo time, while the Nikkei 225 advanced 0.1% to 29,783.92. Out of 2,180 shares in the index, 1,107 rose and 948 fell, while 125 were unchanged. “There are uncertainties surrounding the direction of U.S. monetary policy,” said Shoji Hirakawa, chief global strategist at Tokai Tokyo Research Institute Co. “The latest comments from FRB members are spurring talk that steps to taper could accelerate.” Australian stocks sunk as banks tumbled to almost a 4-month low. The S&P/ASX 200 index fell 0.6% to close at 7,353.10, weighed down by banks and technology stocks as the measure for financial shares finished at the lowest level since July 30.  Nickel Mines was the top performer after agreeing to expand its strategic partnership with Shanghai Decent. Flight Centre fell for a second session, ending at its lowest close since Sept. 20, as the Covid-19 situation worsens in Europe. In New Zealand, the S&P/NZX 50 index fell 1% to 12,607.64. In FX, the Bloomberg dollar index holds Asia’s narrow range, trading little changed on the day. AUD outperforms G-10 peers, extending Asia’s modest gains. SEK and JPY are the weakest. RUB lags in EMFX, dropping as much as 1% versus the dollar with USD/RUB on a 74-handle. According to Bloomberg, hedge funds’ bullishness toward the dollar is starting to evaporate amid speculation the U.S. currency has risen too much given the Federal Reserve remains adamant it’s in no rush to raise interest rates. Meanwhile, the euro pared modest Asia session losses to trade below $1.13, while European bond yields edged higher, led by bunds and gilts. The pound dipped after comments from Bank of England policy makers raised questions about the certainty of an interest-rate increase in December. Governor Andrew Bailey said that the risks to the U.K. economy are “two-sided” in a weekend interview. Australian dollar advanced against the kiwi on position tweaking ahead of Wednesday’s RBNZ’s rate decision, and after China’s central bank removed sticking with “normal monetary policy” from its policy outlook. Yen declines as speculation China will steer toward more accommodative policy damps the currency’s haven appeal. Hungary’s forint tumbled to a record low against the euro as back-to-back interest rate increases failed to shield it during a rapidly deteriorating pandemic and a flight to safer assets. In commodities, crude futures drifted higher. WTI rises 0.3% near $76.20, Brent regains at $79-handle. Spot gold has a quiet session trading near $1,844/oz. Base metal are mixed: LME copper, tin and zinc post small losses; lead and nickel are in the green Looking at today's calendar, we get the October Chicago Fed national activity index, existing home sales data, and the Euro Area advance November consumer confidence. Zoom is among the companies reporting earnings. Market Snapshot S&P 500 futures up 0.3% to 4,710.75 STOXX Europe 600 up 0.3% to 487.45 German 10Y yield little changed at -0.34% Euro little changed at $1.1283 MXAP down 0.2% to 198.88 MXAPJ down 0.2% to 647.20 Nikkei little changed at 29,774.11 Topix little changed at 2,042.82 Hang Seng Index down 0.4% to 24,951.34 Shanghai Composite up 0.6% to 3,582.08 Sensex down 2.0% to 58,450.84 Australia S&P/ASX 200 down 0.6% to 7,353.08 Kospi up 1.4% to 3,013.25 Brent Futures up 0.4% to $79.22/bbl Gold spot little changed at $1,846.10 U.S. Dollar Index also little changed at 96.08 Top Overnight News from Bloomberg Negotiators hammering out details of a transformative new global corporate tax regime are shaping the deal to maximize its chance of winning acceptance in the U.S., whose companies face the biggest impact from the overhaul The U.S. has shared intelligence including maps with European allies that shows a buildup of Russian troops and artillery to prepare for a rapid, large-scale push into Ukraine from multiple locations if President Vladimir Putin decided to invade, according to people familiar with the conversations. The ruble slid to the weakest since August and the hryvnia fell With investors ramping up expectations for the Federal Reserve and other developed-market central banks to tighten policy, the likes of the Brazilian real and Hungarian forint have been weighed down by inflation and political concerns even as local officials pushed up borrowing costs. The Chinese yuan, Taiwanese dollar and Russian ruble have been among the few to stand their ground An organization formed by key participants in China’s currency market urged banks to limit speculative foreign-exchange trading after the yuan climbed to a six-year high versus peers The Avalanche cryptocurrency has surged in the past several days, taking it briefly into the top 10 by market value and surpassing Dogecoin and Shiba Inu, after a deal related to improvement of U.S. disaster-relief funding A more detailed breakdown of overnight news courtesy of Newsquawk Asia-Pac stocks traded mixed following last Friday's mostly negative performance stateside, where risk appetite was dampened by concerns of a fourth COVID wave in Europe and recent hawkish Fed rhetoric. Weekend newsflow was light and the mood was tentative heading into this week's risk events including FOMC minutes and US GDP data before the Thanksgiving holiday. The ASX 200 (-0.6%) was subdued with declines led by weakness in gold miners and the energy sector. The Nikkei 225 (+0.1%) was lacklustre after last week’s inflows into the JPY but with downside eventually reversed as the currency faded some of the gains and following the recent cabinet approval of the stimulus spending. The KOSPI (+1.4%) outperformed and reclaimed the 3k level with shares in index heavyweight Samsung Electronics rallying as its de facto leader tours the US which spurred hopes the Co. could deploy its USD 100bln cash pile. The Hang Seng (-0.4%) and Shanghai Comp. (+0.6%) diverged with the mainland kept afloat after the PBoC conducted a mild liquidity injection and maintained its Loan Prime Rate for a 19th consecutive month as expected, although Hong Kong was pressured by losses in energy and cautiousness among developers, as well as the recent announcement of increased constituents in the local benchmark. Finally, 10yr JGBs eked marginal gains amid the cautious risk tone in Asia and following firmer demand at the enhanced liquidity auction for 2yr-20yr JGBs, but with upside capped as T-note futures continued to fade Friday’s early gains that were fuelled by the COVID-19 concerns in Europe before the advances were later halted by hawkish Fed rhetoric calling for a discussion on speeding up the tapering at next month’s meeting. Top Asian News China Blocks Peng Shuai News as It Seeks to Reassure World China FX Panel Urges Banks to Cap Speculation as Yuan Surges Paytm Founder Compares Himself to Musk After Historic IPO Flop China Tech Stocks Are Nearing Inflection Point, UBS GWM Says European cash bourses kicked off the new trading week with mild gains (Euro Stoxx 50 +0.3%; Stoxx 600 +0.3%) following a mixed APAC handover. Some have been attributing the mild gains across Europe in the context of the different approaches of the Fed and ECB, with the latter expected to remain dovish as the former moves tighter, while COVID lockdowns will restrict economic activity. News flow in the European morning has however been sparse, as participants look ahead to FOMC Minutes, Flash PMIs and US GDP ahead of the Thanksgiving holiday (full Newsquawk Desk Schedule on the headline feed) alongside the Fed Chair update from President Biden and a speech from him on the economy. US equity futures see modestly more pronounced gains, with the more cyclically-exposed RTY (+0.6%) performing better than then NQ (+0.4%), ES (+0.4%) and YM (+0.4%). Since the European cash open, the initial mildly positive momentum has somewhat waned across European cash and futures, with the region now conforming to a more mixed picture. Spain's IBEX (+0.7%) is the clear regional outperforming, aided by index heavyweight Telefonica (+5.0%), which benefits from the sectorial boost received by a couple of major M&A updates. Firstly, Telecom Italia (+22%) gapped higher at the open after KKR presented a EUR 0.505/shr offer for Telecom Italia. The offer presents a ~45% premium on Friday's close. Second, Ericsson (-3.5%) made a bid to acquire American publicly held business cloud communications provider Vonage in a deal worth USD 6.2bln. As things stand, the Telecom sector is the clear outperformer, closely followed by banks amid a revival in yields. The other end of the spectrum sees Travel & Leisure back at the foot of the bunch as COVID fears in Europe mount. In terms of individual movers, Vestas Wind Systems (-2.0%) was hit as a cyber incident that impacted parts of its internal IT structure and data has been compromised. Looking ahead, it’s worth noting that volume will likely be more muted towards the latter half of the week on account of the Thanksgiving holiday. Top European News Scholz Closer to German Chancellery as Cabinet Takes Shape Austria Back in Lockdown Ahead of Mandatory Vaccine Policy Energy Crunch Drives Carbon to Record as Europe Burns More Coal BP Goes on Hydrogen Hiring Spree in Bid for 10% Market Share In FX, the Antipodean Dollars are outperforming at the start of the new week on specific supportive factors, like a bounce in the price of iron ore and a further re-opening from pandemic restrictions in both Australia and New Zealand, while the REINZ shadow board is ‘overwhelmingly’ behind another RBNZ rate hike this week. Aud/Usd is holding around 0.7250 and Nzd/Usd is hovering circa 0.7000 as the Aud/Nzd cross pivots 1.0350 in the run up to flash Aussie PMIs and NZ retail sales. DXY - Aussie and Kiwi strength aside, the Greenback retains a solid underlying bid on safe haven and increasingly hawkish Fed grounds after a run of recent much better than expected US data. In index terms, a base just above 96.000 provides a platform to retest last week’s peaks at 96.245 and 96.266 vs 96.223 so far, but Monday’s agenda may not give bulls much in the way of encouragement via data with only existing home sales scheduled. Instead, the Buck could derive more impetus from Treasuries given front-loaded supply ahead of Thanksgiving in the form of Usd 58 bn 2 year and Usd 59 bn 5 year notes. CHF/CAD/EUR/GBP/JPY - All narrowly mixed against their US rival, as the Franc keeps its head above 0.9300 and meanders between 1.0485-61 vs the Euro amidst some signs of official intervention from a rise in weekly Swiss sight deposits at domestic banks. Meanwhile, the Loonie has some leverage from a mild rebound in crude prices to pare declines from sub-1.2650 and should glean support into 1.2700 from 1 bn option expiries at 1.2685 on any further risk aversion or fallout in WTI. Conversely, 1 bn option expiry interest from 1.1300-05 could scupper Euro recoveries from Friday’s new y-t-d low around 1.1250 against the backdrop of ongoing COVID-19 contagion and pre-ECB speakers plus preliminary Eurozone consumer confidence. Elsewhere, the Pound is weighing up BoE tightening prospects and the impact of no breakthrough between the UK and EU on NI Protocol as Cable and Eur/Gbp straddle the 1.3435-40 zone and 0.8400 respectively, while the Yen has unwound more of its safe haven premium within a 114.27-113.91 range eyeing UST yields in relation to JGBs alongside overall risk sentiment. SCANDI/EM - The Nok is deriving some traction from Brent back over Usd 79/brl, but geopolitical concerns are preventing the Rub from benefiting and the Mxn is also on a weaker footing along with most EM currencies. However, the Try is striving to draw a line in the sand irrespective of a marked deterioration in Turkish consumer sentiment and the Cnh/Cny are holding up well regardless of a softer PBoC fix for the onshore unit as LPRs were unchanged yet again and China’s FX regulator told banks to limit Yuan spec trades. In CEE, the Pln has plunged on diplomatic strains between Poland and the EU, the Huf has depreciated to all time lows on virus fears and the Czk has been hampered by CNB’s Holub downplaying the chances of more big tightening surprises such as the aggressive hike last time. In commodities, WTI and Brent front month futures see some consolidation following Friday’s slide in prices. In terms of the fundamentals, the demand side of the equations continues to be threatened by the fourth wave of COVID, namely in the European nations that have not had a successful vaccine rollout. As a reminder, Austria is in a 20-day nationwide lockdown as of today, whilst Germany, Belgium and the Netherlands see tighter restrictions, with the latter two also experiencing COVID-related social unrest over the weekend. The European Commission will on Wednesday issue a set of new recommendations to its member states on non-essential travel, a senior EU diplomat said, which will be watched for activity and jet fuel demand. Over to the supply side, There were weekend reports that Japan and the US are planning a joint announcement regarding the SPR release, although a key Japanese official later noted there was no fixed plan yet on releasing reserves. Japanese PM Kishida confirmed that they are considering releasing oil reserves to curb prices. Meanwhile, Iranian nuclear talks are regaining focus as negotiations are poised to resume on the 29th of November – it is likely we’ll see officials telegraph their stances heading into the meeting. Eyes will be on whether the US offers an olive branch as Tehran stands firm. Elsewhere, the next OPEC+ meeting is also looming, but against the backdrop of lower prices, COVID risk and SPR releases, it is difficult to see a scenario where OPEC+ will be more hawkish than dovish. WTI and Brent Jan trade on either side of USD 76/bbl and USD 79/bbl respectively and within relatively narrow bands. Spot gold and silver meanwhile see a mild divergence, with the yellow metal constrained by resistance in the USD 1,850/oz area, whilst spot silver rebounded off support at USD 24.50/oz. Finally, base metals are relatively mixed with no standout performers to point out. LME copper is flat but holds onto USD 9,500+/t status. US Event Calendar 8:30am: Oct. Chicago Fed Nat Activity Index, est. 0.10, prior -0.13 10am: Oct. Existing Home Sales MoM, est. -1.8%, prior 7.0% 10am: Oct. Home Resales with Condos, est. 6.18m, prior 6.29m DB's Jim Reid concludes the overnight wrap This morning we’ve just published our 2022 credit strategy outlook. 2021 has been one of the lowest vol years for credit on record but we think this is unlikely to last and spreads will sell-off at some point in H1 when markets reappraise how far behind the curve the Fed is. Even with covid restrictions mounting again in Europe as we go to print, we think it’s more likely that we’ll be in a “growthflationary” environment for 2022 and think overheating risks are more acute than the stagflation risk, especially in the US. Strong growth and high liquidity should mean that full year 2022 is a reasonable year for credit overall but if we’re correct there’ll be regular pockets of inflationary/interest rate concerns in the market, which we think is more likely to happen in H1. At the H1 wides, we could see spreads widen as much as 30-40bps in IG and 120-160bps in HY which is consistent with typical mid-cycle ranges through history. We do expect this to mostly retrace in H2 as markets recover from the shock and growth remains decent and liquidity still high. However, with the potential for a shift in the narrative to potential late-cycle dynamics, we think spreads will close 2022 slightly wider than they are today. We will be watching the yield curve closely through the year for clues as to how the cycle will evolve into 2023. This has the ability to move our YE 22 forecasts in both directions as the year progresses. This week will be heavily compressed given Thanksgiving on Thursday. The highlight though will be a likely choice of Fed governor before this, assuming the timetable doesn’t slip again. Overnight it’s been announced that Biden will give a speech to the American people tomorrow on the economy and prices. It’s possible the Fed Chair gets announced here and perhaps plans to release oil from the strategic reserve. We will see. Following that, Wednesday is especially busy as a pre-holiday US data dump descends upon us. We’ll see the minutes of the November 3rd FOMC meeting and earlier that day the core PCE deflator (the Fed's preferred inflation metric), Durable Goods, the UoM sentiment index (including latest inflation expectations), new home sales and jobless claims amongst a few other releases. More internationally, covid will be focus, especially in Europe as Austria enters lockdown today after the shock announcement on Friday. Germany is probably the swing factor here for sentiment in Europe so case numbers will be watched closely. Staying with Germany, there’s anticipation that a coalition agreement could be reached in Germany between the SPD, Greens and the FDP, almost two months after their federal election. Otherwise, the flash PMIs for November will be in focus, with the ECB following the Fed and releasing the minutes from their recent meeting on Thursday. As discussed at the top the most important market event this week is likely to be on the future leadership of the Federal Reserve, as it’s been widely reported that President Biden is expected to announce his choice on who’ll be the next Fed Chair by Thanksgiving on Thursday. Previous deadlines have slipped on this announcement, but time is becoming increasingly limited given the need for Senate confirmation ahead of Chair Powell’s current four-year term expiring in early February. The two names that are quite obviously in the frame are incumbent Chair Powell and Governor Brainard, but there are also a number of other positions to fill at the Fed in the coming months, with Vice Chair Clarida’s term as an FOMC governor expiring in January, Randal Quarles set to leave the Board by the end of this year, and another vacant post still unfilled. So a significant opportunity for the Biden administration to reshape the top positions at the Fed. In spite of all the speculation over the position of the Fed Chair, our US economists write in their latest Fed update (link here), that the decision is unlikely to have a material impact on the broad policy trajectory. Inflation in 2022 is likely to remain at levels that make most Fed officials uncomfortable, whilst the regional Fed presidents rotating as voters lean more hawkish next year, so there’ll be constraints to how policy could shift in a dovish direction, even if an incoming chair wanted to move things that way. Another unconfirmed but much anticipated announcement this week could come from Germany, where there’s hope that the centre-left SPD, the Greens and the liberal FDP will finally reach a coalition agreement. The general secretaries of all three parties have recently said that they hope next week will be when a deal is reached, and a deal would pave the way for the SPD’s Olaf Scholz to become chancellor at the head of a 3-party coalition. Nevertheless, there are still some hurdles to clear before then, since an agreement would mark the start of internal party approval processes. The FDP and the SPD are set to hold a party convention, whilst the Greens have announced that their members will vote on the agreement. On the virus, there is no doubt things are getting worse in Europe but it’s worth putting some of the vaccine numbers in some context. Austria (64% of total population) has a double vaccination rate that is somewhat lower than the likes of Spain (79%), Italy (74%), France (69%), the UK (69%) and Germany (68%). The UK for all its pandemic fighting faults is probably as well placed as any due to it being more advanced on the booster campaign due to an earlier vaccine start date and also due to higher natural infections. It was also a conscious decision back in the summer in the UK to flatten the peak to take load off the winter wave. So this is an area where scientists and the government may have made a calculated decision that pays off. Europe is a bit behind on boosters versus the UK but perhaps these will accelerate as more people get 6 months from their second jab, albeit a bit too late to stop some kind of winter wave. There may also be notable divergence within Europe. Countries like Italy and Spain (and to a slightly lesser extent France) that were hit hard in the initial waves have a high vaccination rate so it seems less likely they will suffer the dramatic escalation that Austria has seen. Germany is in the balance as they have had lower infection rates which unfortunately may have encouraged slightly lower vaccination rates. The irony here is that there is some correlation between early success/lower infections and lower subsequent vaccination rates. The opposite is also true - i.e. early bad outcomes but high vaccination rates. The US is another contradiction as it’s vaccination rate of 58% is very low in the developed world but it has had high levels of natural infections and has a higher intolerance for lockdowns. So tough to model all the above. Overall given that last winter we had no vaccines and this year we have very high levels of protection it seems unfathomable that we’ll have an outcome anywhere near as bad. Yes there will be selected countries where the virus will have a more severe impact but most developed countries will likely get by without lockdowns in my opinion even if the headlines aren’t always going to be pleasant. Famous last words but those are my thoughts. In light of the rising caseloads, the November flash PMIs should provide some context for how the global economy has performed into the month. We’ve already seen a deceleration in the composite PMIs for the Euro Area since the summer, so it’ll be interesting to see if that’s maintained. If anything the US data has reaccelerated in Q4 with the Atlanta Fed GDPNow series at 8.2% for the quarter after what will likely be a revised 2.2% print on Wednesday for Q3. Time will tell if Covid temporarily dampens this again. Elsewhere datawise, we’ll also get the Ifo’s latest business climate indicator for Germany on Wednesday, which has experienced a similar deceleration to other European data since the summer. The rest of the week ahead appears as usual in the day-by-day calendar at the end. Overnight in Asia stocks are mixed with the KOSPI (+1.31%) leading the pack followed by the Shanghai Composite (+0.65%) and CSI (+0.53%), while the Nikkei (-0.18%) and Hang Seng (-0.35%) are lower. Stocks in China are being boosted by optimism that the PBOC would be easing its policy stance after its quarterly monetary policy report on Friday dropped a few hints to that effect. Futures are pointing towards a positive start in the US and Europe with S&P 500 futures (+0.31%) and DAX futures (+0.14%) both in the green. Turning to last week now, rising Covid cases prompted renewed lockdown measures to varying degrees and hit risk sentiment. Countries across Europe implemented new lockdown measures and vaccine requirements to combat the latest rise in Covid cases. The standouts included Austria and Germany. Austria will start a nationwide lockdown starting today and will implement a compulsory Covid vaccine mandate from February. Germany will restrict leisure activities and access to public transportation for unvaccinated citizens and announced a plan to improve vaccination efforts. DM ten-year yields decreased following the headline. Treasury, bund, and gilt yields declined -3.8bps, -6.7bps, and -4.6bps on Friday, respectively, bringing the weekly totals to -1.3bps, -8.3bps, and -3.5bps, respectively. The broad dollar appreciated +0.54% Friday, and +0.98% over the week. Brent and WTI futures declined -2.89% and -3.68% on Friday following global demand fears, after drifting -4.27% and -5.79% lower throughout the week as headlines circulated that the US and allies were weighing whether to release strategic reserves. European equity indices declined late in the week as the renewed lockdown measures were publicized. The Stoxx 600, DAX, and CAC 40 declined -0.33%, -0.38%, and -0.42%, respectively on Friday, bringing their weekly totals to -0.14%, +0.41%, and +0.29%. The S&P 500 index was also hit ending the week +0.32% higher after declining -0.14% Friday, though weekly gains were concentrated in big technology and consumer discretionary stocks. U.S. risk markets were likely supported by the U.S. House of Representatives passing the Biden Administration’s climate and social spending bill. The bill will proceed to the Senate, where its fate lays with a few key moderate Democrats. This follows President Biden signing a physical infrastructure bill into law on Monday. On the Fed, communications from officials took a decidedly more hawkish turn on inflation dynamics, especially from dovish members. Whether the Fed decides to accelerate its asset purchase taper at the December FOMC will likely be the key focus in markets heading into the meeting. Ending the weekly wrap up with some positive Covid news: the U.S. Food and Drug Administration cleared Pfizer and Moderna booster shots for all adults. Additionally, the US will order 10 million doses of Pfizer’s Covid pill. Tyler Durden Mon, 11/22/2021 - 07:49.....»»

Category: blogSource: zerohedgeNov 22nd, 2021

Are Investors Delusional...Or Exploiting The Delusion Of Others?

Are Investors Delusional...Or Exploiting The Delusion Of Others? Authored by Bill Blain via MorningPorridge.com, “Customers don’t expect you to be perfect, but they do expect you to fix it when it goes wrong..” Markets are roiled by lockdowns and approaching holidays. Already the guessing season has begun – with predictions running all the way from Gloomy to Dire. Central Banks will be anxious to be seen to be doing the right thing – which probably means more of the same. And investors? Delusional or exploiting the delusion of others.   Rather than a Bang, it feels likely 2021 is going to end on a phuttering wheeze… New lockdowns across Europe, and one-off lock-ups in China, to address outbreaks are a reminder Covid isn’t over. The global economy may be getting used to the virus, but when folk start coughing…. markets take notice. In the UK the numbers remain significant, but it looks extremely unlikely Government will try to close the economy – which may be the smart thing to do… I guess we will find out. As Coronavirus adds to the general air of misery, Morgan Stanley and others are warning it’s going to be a tough market, more boom and bust and greater volatility. No Sh*t Sherlock awards to them all. There are an increasing number of Market Big Dogs warnings about “red lights”, “bubble valuations”, and reversal indications – all of which is exactly what you’d expect at this time of year. Come the end of November and the US Thanksgiving holiday this week marks the beginning of the Guessing Season – when analysts and strategists around the globe present their best stabs-in-the-dark on what might just happen next year. Every year I say something sage and wise along the lines of Stocks Markets might go up while Bond yields could rise, but maybe not. The one strategic outlook I really look forward to is Saxo Bank’s Outrageous Predictions… it’s a must read. Sadly, none of their predictions for 2021 came to pass. Germany did not bail out France. Amazon did not buy Cyprus. Blockchain is still a solution looking for the problem it might be able to solve, and we didn’t crack nuclear fusion to give us all unlimited energy.. Back on Planet Now, consumer confidence is crashing in the face of 6% plus inflation and the threat of higher interest rates. Corporates are complaining about soaring labour costs, rising input prices and warning about difficulties to come. Yet, the market is still trading at levels any previous generation would dismiss as insane. Is that a surprise…? Not really. Central banks got us here, but will they get us out? We’re watching to hear who will be given the reins at the Fed; a dove or a dove? And in Europe the FT reports the spat between departing Bundesbanker Jens Weidmann and the ECB: “Given the considerable uncertainty about the inflation outlook, monetary policy should not commit to its current very expansionary stance for too long”, says the last Bond Vigilante. It’s unlikely to change the ECB’s perspective. How central banks respond to the current market will be critical – but let’s face it; turkeys don’t vote for Christmas or Thanksgiving, and Central Bankers are going to take the heat. They will be measured and fail to deliver shocks. If you are looking for the Central Banks to be dramatic – you are watching the wrong channel. Everyone is waking up to the inflation threat – and trying to second guess just how transitory it may be. Prices rose because of supply chain breakdowns – which will correct given time. But upward pressure on prices is easy – downward pressure will be sticky even after these supply chain issues are cured. The result is the current round of wage inflation – if tractor makers get a hike in one state, you can bet everyone else will demand similar. Inflation may be triggered by a “transitory”, but it builds momentum fast – which is where the central banks are going to struggle with their overuse of the T word. Which neatly brings us to the question – when are Central Banks going to do the right thing to normalise rates? Many fools argue rates should have risen earlier to address inflation, but doing so would simply have created an economic downturn just as the globe was coming out of lockdown. In normal markets rising and falling interest rates could be used to moderate demand and supply – but not once the genie is out the bottle. The big issue facing investors today is relative pricing. Stocks look massively over-priced. But relative to negative bond yields, they show much greater relative value. Predicting a crash because stocks are overvalued misses the point.. they need to be overvalued to something.. In the past I always said: “In Bonds There is Truth”. But there isn’t any truth anymore. Bond prices are distorted and set artificially low.. And that simply encapsulates why stocks are so high – relative to mispriced bonds. So when is the great crash going to come.. if at all? This is a very different world. While the global market is simply a voting machine – weighing up everyone’s vote to arrive at the market price, it’s a question of who owns the votes. This is an educated guess; but I reckon the top 10 largest institutional investors on the planet control around $33 trillion AUM. The total volume of liquid bonds is around $120 trillion, while global stocks have a total market cap around $107 trillion. Therefore – the 10 largest voters on the market control around 14.5% of the total financial asset float. That’s a lot of control. They have a problem. They are so big they can’t generate alpha returns from markets where they are the market. They probably also suffer from groupthink – I doubt market fundamentals on key issues like central bank behaviour, rates, the dollar and risk are perceived that differently at Blackrock or UBS? Their scale also gives them a block vote on prices – owning 15% of the global stock market is more than enough to keep nudging it in the right direction, and using their bulk to push hard when required. Global risk now resides with these names – not the banks. I’m not saying they rig the market in their favour – but it’s clear they are likely to move in parallel directions in terms of the strategic direction of prices. Does that mean you should be reading all their research? Probably. At the tactical level – is it the actions of the 70% institutional market, or the 30% of volume controlled by retail investors that spins the prices of meme-stocks and cryptos? Probably. These moves in stocks like Rivian are aberrations, but smart traders will play them, trading on the crowd sentiment. As we’re all aware, much of the activity just doesn’t make sense. While Rivian was worth billions despite an abject lack of sales, at the end of the spectrum we saw a major Big Tech corporate name’s stock crash last week. Its crime? It missed earnings forecasts by a couple of percentage points, and its stock tumbled 11% overnight. Wow! That tells us market confidence in the company has cratered, with a pretty damning outlook on the key issues like the firm’s future profitability, its ability to sustain earnings, management quality and competitive threat environment. The firm in question is Alibaba. It is my worst performing stock pick of 2020, and has cost me dear this year. Earnings came in at $31.1, but earning forecasts were $32.1 bln! $30 bln… that’s what Tesla might struggle to make over a couple of decades – but, of course, its “phenomenal earnings-quality” means its’ tiny profits might be a fraction of Alibaba’s, but are worth 4 times Alibaba’s enterprise value. Apparently. The risks to Alibaba are clear: regulation, censorship, political sensitivities, data privacy, etc. Analysts collectively describe these as “headwinds”. Yet, fundamentally, it’s a great business with a strong established position across the Chinese markets. My guess is the retail/sentiment traders won’t see that – but the big boys will. Tyler Durden Mon, 11/22/2021 - 08:07.....»»

Category: blogSource: zerohedgeNov 22nd, 2021

Inflation Risk: Milton Friedman Would Buy Gold Right Now

Powell maintains that inflation is transitory, but the monetary theory of inflation suggests otherwise. So, elevated inflation could stay with us! Q3 2021 hedge fund letters, conferences and more Economists Downplay The Inflation Risk Some economists downplay the risk stemming from elevated inflation, saying that comparisons to the 1970s style stagflation appear unfounded. They say […] Powell maintains that inflation is transitory, but the monetary theory of inflation suggests otherwise. So, elevated inflation could stay with us! if (typeof jQuery == 'undefined') { document.write(''); } .first{clear:both;margin-left:0}.one-third{width:31.034482758621%;float:left;margin-left:3.448275862069%}.two-thirds{width:65.51724137931%;float:left}form.ebook-styles .af-element input{border:0;border-radius:0;padding:8px}form.ebook-styles .af-element{width:220px;float:left}form.ebook-styles .af-element.buttonContainer{width:115px;float:left;margin-left: 6px;}form.ebook-styles .af-element.buttonContainer input.submit{width:115px;padding:10px 6px 8px;text-transform:uppercase;border-radius:0;border:0;font-size:15px}form.ebook-styles .af-body.af-standards input.submit{width:115px}form.ebook-styles .af-element.privacyPolicy{width:100%;font-size:12px;margin:10px auto 0}form.ebook-styles .af-element.privacyPolicy p{font-size:11px;margin-bottom:0}form.ebook-styles .af-body input.text{height:40px;padding:2px 10px !important} form.ebook-styles .error, form.ebook-styles #error { color:#d00; } form.ebook-styles .formfields h1, form.ebook-styles .formfields #mg-logo, form.ebook-styles .formfields #mg-footer { display: none; } form.ebook-styles .formfields { font-size: 12px; } form.ebook-styles .formfields p { margin: 4px 0; } Get The Full Series in PDF Get the entire 10-part series on Charlie Munger in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues. (function($) {window.fnames = new Array(); window.ftypes = new Array();fnames[0]='EMAIL';ftypes[0]='email';}(jQuery));var $mcj = jQuery.noConflict(true); Q3 2021 hedge fund letters, conferences and more Economists Downplay The Inflation Risk Some economists downplay the risk stemming from elevated inflation, saying that comparisons to the 1970s style stagflation appear unfounded. They say that labor unions are weaker and economies are less dependent on energy than in the past, which makes inflationary risks less likely to materialize. Isabel Schnabel, Board Member of the European Central Bank, even compared the current inflationary spike to a sneeze, i.e., “the economy’s reaction to dust being kicked up in the wake of the pandemic and the ensuing recovery”. Are those analysts right? Well, in a sense, they are. The economy is not in stagnation with little or no growth and a rising unemployment rate. On the contrary, the US labor market is continuously improving. It’s also true that both the bargaining power of workers and energy’s share in overall expenditure have diminished over the last fifty years. However, general inflation is neither caused by wages nor energy prices. Higher wages simply mean lower profits, so although employees can consume more, employers can spend less. If wages are set above the potential market rates, then unemployment emerges - not inflation. Similarly, higher energy prices affect the composition of spending, but not the overall monetary demand spent on goods and services. It works as follows: when the price of oil increases, people have to spend more money on oil (assuming the amount of consumed oil remains unchanged), which leaves less money available for other goods and services. So, the overall money spent on goods won’t change. As a consequence, the structure of relative prices will change, but widespread prices increases won’t happen. In other words, Milton Friedman’s dictum remains valid: “Inflation is always and everywhere a monetary phenomenon in the sense that it is and can be produced only by a more rapid increase in the quantity of money than in output”. It’s quite a simple mechanism, even central bankers should be able to understand it: if the stock of goods remains unaltered while the stock of money increases, this, as Frank Shostak put it, “must lead to more money being spent on the unchanged stock of goods – an increase in the average price of goods” Growth In M2 Money Supply Let’s look at the chart below, which displays the annual growth rates in the broad money supply (M2, red line) and in the CPI (green line). We can notice two important things. First, in the 1970s, the pace of broad money supply growth was relatively high, as it reached double-digit values at some point. As a consequence, inflation accelerated, jumping above 10% for a while. In other words, stagflation was born. Since then, the rate of growth in the money supply never reached double-digit numbers on a prolonged basis, including the Great Recession, so high inflation never materialized. And then the pandemic came. In March 2020, the money supply growth rate crossed the 10% threshold and never came back. In February 2021, it reached its record height of 27.1%. The pace of growth in the M2 money aggregate has slowed down since then, dropping to a still relatively high rate of 13%. This is a rate that is almost double the pre-pandemic level (6.8% in February 2020) and the long-term average (7.1% for the 1960-2021 period ). So, actually, given the surge in the broad money supply and the monetary theory of inflation, rapidly rising prices shouldn’t be surprising at all. Second, there is a lag between the money supply growth and the increase in inflation rates. That’s why some analysts don’t believe in the quantity theory of money – there is no clear positive correlation between the two variables. This is indeed true – but only when you take both variables from the same periods. The correlation coefficient becomes significant and positive when you take inflation rates with a lag of 18-24 months behind the money supply. As John Greenwood and Steve Hanke explain in opinion for Wall Street Journal, According to monetarism, asset-price inflation should have occurred with a lag of one to nine months. Then, with a lag of six to 18 months, economic activity should have started to pick up. Lastly, after a lag of 12 to 24 months, generalized inflation should have set in. If this relationship is true, then inflation won’t go away anytime soon. After all, the money supply accelerated in March 2020 and peaked in February 2021, growing at more than four times the “optimal” rate that would keep inflation at the 2-percent target, according to Greenwood and Hanke. In line with the monetarist description, the CPI rates accelerated in March 2021, exactly one year after the surge in the money supply. So, if this lag is stable, the peak in inflation rates should happen in Q1 2022, and inflation should remain elevated until mid-2022 at least. Implications For Gold What does it mean for the gold market? Well, if the theory of inflation outlined above is correct, elevated inflation will stay with us for several more months. Therefore, it’s not transitory, as the central bank tells us. Instead, inflation should remain high for a while, i.e., as long as the money supply growth won’t slow down and go back below 10% on a sustained basis. What’s more, the velocity of money, which plunged when the epidemic started, is likely to rise in the coming months, additionally boosting inflation. So, I would say that Milton Friedman would probably forecast more persistent inflation than Jerome Powell, allocating some of his funds into the yellow metal. Gold is, after all, considered to be an inflation hedge, and it should appreciate during the period of high and rising inflation. Although so far gold hasn’t benefited from higher inflation, this may change at some point. Actually, investors’ worries about inflation intensified in October, and gold started to show some reaction to the inflationary pressure. My bet is that the next year will be better for gold than 2021: the Fed’s tightening cycle will already be inaugurated, and thus traders will be able to focus on inflation, possibly shifting the allocation of some of their funds into gold as a safe-haven asset. Thank you for reading today’s free analysis. We hope you enjoyed it. If so, we would like to invite you to sign up for our free gold newsletter. Once you sign up, you’ll also get 7-day no-obligation trial of all our premium gold services, including our Gold & Silver Trading Alerts. Sign up today! Arkadiusz Sieron, PhD Sunshine Profits: Effective Investment through Diligence & Care. Updated on Nov 19, 2021, 2:12 pm (function() { var sc = document.createElement("script"); sc.type = "text/javascript"; sc.async = true;sc.src = "//mixi.media/data/js/95481.js"; sc.charset = "utf-8";var s = document.getElementsByTagName("script")[0]; s.parentNode.insertBefore(sc, s); }()); window._F20 = window._F20 || []; _F20.push({container: 'F20WidgetContainer', placement: '', count: 3}); _F20.push({finish: true});.....»»

Category: blogSource: valuewalkNov 20th, 2021

Practices that enable short-selling could become more transparent under a new SEC rule in response to GameStop mania

Securities lenders would have to report material information on loans within 15 minutes of the transaction. Ben Gilbert/Business InsiderBen Gilbert/Business Insider The SEC proposed a new rule that would make short selling more transparent The rule requires lenders to report transactions within 15 minutes to a governing body, like FINRA. Short selling came under scrutiny earlier this year after retail traders drove the price of GameStop higher. Regulators want to make the practices behind shorting stock more transparent under a new rule crafted in response to the GameStop short squeeze in January. On Thursday, the US Securities and Exchange Commission proposed a new regulation that would "provide transparency in the securities lending market," a market that SEC Chair Gary Gensler said is currently opaque.Short selling is a bet that a company's shares will decline. To do it, an investor borrows shares from a counterparty willing to lend, and then sells them. If the stock falls, as hoped, the investor buys the shares back and returns the shares, pocketing the difference. The new rule requires firms lending securities to report the "material terms" of each loan to a governing body like the Financial Industry Regulatory Authority within 15 minutes of the transaction. That information would then be made public. "This proposal would bring securities lending out of the dark," Gensler said. The public has 30 days to comment on the proposal. In January, short-selling came under scrutiny when hordes of retail traders loosely organized on Reddit to drive up the share price of meme stocks, GameStop included. The video-game retailer was shorted more than 100%, according to Reuters, meaning more shares were shorted than were available to trade. Retail traders noticed, and aimed to create what they called a "MOASS," or the mother of all short squeezes, to cause short-sellers to take losses on their bets. In its statement, the SEC said its new rule is in line with the Dodd-Frank Act, legislation that was passed following the 2008 market crash. The SEC's rule ensures "market participants, the public, and regulators have access to timely and comprehensive information about the market for securities lending."Read the original article on Business Insider.....»»

Category: personnelSource: nytNov 19th, 2021

Futures Tumble, Oil And Treasury Yields Plunge As Lockdowns Return

Futures Tumble, Oil And Treasury Yields Plunge As Lockdowns Return Having briefly touched new all time highs of 4,723.5 overnight, S&P futures tumbled shortly after Europe opened as a fourth wave of the pandemic in Europe resulted in a new lockdown in Austria and the prospect of similar action in Germany wiped out earlier gains and forced stock markets down close to 1% as it overshadowed optimism about corporate earnings and the economic recovery. Friday is also a major options-expiry day, which could trigger volatility in equities. Two progressive Democratic senators said they oppose the renomination of Federal Reserve Chair Jerome Powell to a second term, because he "refuses to recognize climate change" joining Elizabeth Warren in urging President Joe Biden to choose someone else. S&P and Dow futures fell tracking losses in banks, airlines, and other economically sensitive sectors. Uncertainty over rising inflation and the Federal Reserve's tightening also kept demand for value stocks low. At 745am Dow e-minis were down 218 points, or 0.609%. S&P 500 e-minis were down 12.25 points, or 0.26% and Nasdaq 100 e-minis were up 68 points, or 0.41%. With the lockdown trade storming back, Nasdaq futures hit a record high on Friday as investors sought economically stable sectors after a small delay in voting on President Joe Biden's $1.75 trillion spending bill, while fears of Europe-wide lockdowns sent yields plunging. The U.S. House of Representatives early on Friday delayed an anticipated vote on passage of Biden's social programs and climate change investment bill, and will instead reconvene at 8 a.m. EST (1300 GMT) to complete the legislation “Everyone is holding his and her breath to find out who will be the next Fed Chair,” said Ipek Ozkardeskaya, senior analyst at Swissquote. “More or less dovish, will it really matter? The one that will take or keep the helm of the Fed will need to hike rates at some point.” Among major premarket movers, Intuit Inc jumped 10.3% as brokerages raised their price targets on the income tax software company after it beat quarterly estimates and raised forecast. The stock was the top S&P 500 gainer in premarket trade. Chipmaker Nvidia also boosted Nasdaq futures, rising 1.7% in heavy trade after posting strong quarterly results late Wednesday. On the other end, Applied Materials dropped 5.7% after the chipmaker forecast first-quarter sales and profit below market estimates on supply chain woes. Oil firms Exxon and Chevron slipped 2.1% and 1.8% as crude prices sank, while big banks including JPMorgan and Bank of America were down between 0.9% and 1.1%, tracking a fall in U.S. Treasury yields. Carriers Delta Air Lines, United Airlines and American Airlines and cruiseliners Norwegian Cruise Line and Carnival Corp fell between 1.4% and 2.3%. Here are all the other notable movers: Farfetch (FTCH US) shares drop 23% after the online apparel retailer reported 3Q revenue that missed estimates and trimmed its FY forecast for digital platform gross merchandise value growth. Analysts see scope for the shares to stay in the “penalty box” in the near term, but recommend buying on weakness. Workday (WDAY US) analysts say that the software firm’s strong quarterly results and guidance were not quite enough to meet high expectations. The stock dropped as much as 11% in extended trading on Thursday. Intuit (INTU US) climbed 9.7% in premarket as analysts said the tax software company posted strong results that were ahead of expectations and raised its outlook. Several increased their price targets for the stock, including a new Street high at Barclays. Palo Alto Networks (PANW US) shares rise 2.8% in U.S. premarket trading after the cyber- security firm reports results and hikes full-year sales guidance, with RBC saying co. saw a strong quarter. Tesla (TSLA US) shares dip 0.5% in premarket trading. The EV maker’s price target is raised to a joint Street-high at Wedbush, with the broker saying that the EV “revolution” presents a $5t market opportunity over the next decade. Datadog (DDOG US) rises 1.8% after it is upgraded to outperform from sector perform at RBC, with the broker saying that it has more conviction on the software firm following its TMIT conference. Mammoth Energy (TUSK US) jumps as much as 34% in U.S. premarket trading after the energy-services company said a subsidiary has been awarded a contract by a major utility to help build electric-vehicle charging station infrastructure. Ross Stores (ROST US) shares dropped 2.2% in postmarket trading on Thursday after its profit outlook for fourth quarter missed the average analyst estimate. In Europe, banks and carmakers led the Stoxx Europe 600 Index down 0.3%, reversing early gains. Fears of fresh lockdowns have hit travel stocks, but boosted the delivery sector and other pandemic winners, with German meal-kit company HelloFresh jumping as much as 7.1% to a record. Stoxx Europe 600 index tumbled after Germany’s health minister said he couldn’t rule out a lockdown as infections surge relentlessly in the region’s largest economy. That came after Austria said it would enter a nationwide lockdown from Monday. Here are some of the biggest European movers today: Ocado shares jump as much as 8.4%, the most intraday since November 2020, after a Deutsche Bank note on joint venture partner Marks & Spencer highlighted scope for a potential transaction. VGP shares gain as much as 7.7% to a record after KBC raised its rating to accumulate from hold, based on a “strong” 10-month trading update. HelloFresh shares surge as much as 7.1% and other lockdown beneficiaries including Delivery Hero, Logitech and Zalando gain after the German health minister says a lockdown can’t be ruled out. Mall landlords Unibail and Klepierre and duty-free retailer Dufry drop. Truecaller shares rise as much as 14% after it received its first analyst initiations after last month’s IPO. Analysts highlighted the company’s potential for continued strong growth. JPMorgan called current growth momentum “unparalleled.” Hermes shares jump as much as 5.2% to a fresh record, rising for a seventh day, amid optimism that the stock may be added to the Euro Stoxx 50 Index as soon as next month. Shares also rise after bullish current- trading comments of peer Prada. Kingfisher shares drop as much as 5.8%, even after the home-improvement retailer said it expects profit to be toward the higher end of its forecast. Investor focus has probably shifted to 2022, and Friday’s update doesn’t have any guidance for next year, according to Berenberg. GB Group shares tumble as much as 18%, the most since October 2016, after the identity-verification software company raised about GBP300m in a placing of new shares at a discount. Mode Global shares sink as much as 19%, reversing most of this week’s gains, after it said some brands had withdrawn the company as an affiliate. In Fx, the Bloomberg Dollar Spot Index jumped at the London open and the greenback was higher versus all of its Group-of-10 fears apart from yen. Norway’s krone was the biggest loser as energy prices prices dropped after Austria announced a nationwide lockdown starting on Monday, while Germany’s health minister refused to rule out closures in the country.  The pound fell on the back of a stronger dollar; data showed U.K. retail sales rose for the first time in six months as consumers snapped up toys, sports equipment and clothing, while the cost of servicing U.K. government debt more than tripled in October from a year earlier due to surging inflation The euro plunged by 1% to a new YTD low of $1.1255 as the repricing in the front-end of euro options suggests the common currency is settling within a new range. The euro is also falling at the end of the week following the announcement that Austria will begin a 20-day full Covid-19 lockdown from Monday in response to surging case numbers which have far surpassed last year's peak. While fatalities remains well below the peak, they are accelerating and the government is clearly keen to arrest it before the situation potentially becomes much worse. With Germany seeing a similar trend, the question now becomes whether the regions largest economy will follow the same path. Its Health Minister, Jens Spahn, today suggested nothing can be ruled out and that they are in a national emergency. In rates, Treasury yields fell by around 4bps across the board and the bunds yield curve bull flattened, with money markets pushing back bets on a 10bps ECB rate hike further into 2023. Treasury 10-year yields richer by 4.5bp on the day at around 1.54% and toward lows of the weekly range -- bunds, gilts outperform Treasuries by 1bp and 1.5bp in the sector as traders reassess impact of future ECB rate hikes. Treasuries rally across the curve, following wider gains across EGB’s and gilts as investors weigh the impact of further European lockdowns amid a fourth wave of Covid-19. Flight-to-quality pushes Treasury yields lower by up to 5bp across front- and belly of the curve, which slightly outperform.  Bunds and Treasury swap spreads widen, while gilts move tighter as risk assets mostly trade to the downside and demand for havens increases on news regarding coronavirus restrictions. German 10-year swap spreads climbed above 50bps for the first time since March 2020. In commodities, spot gold is little changed around $1,860/oz, while base metals are in the green, with LME copper and aluminum leading peers. Oil tumbled with WTI and Brent contracts down well over 2%.  Brent crudes brief dip below $80 was short-lived on Thursday and prices were continuing to recover on the final trading day of the week until Austria announced its lockdown. Brent crude quickly reversed course and trades almost 2% lower on the day as it takes another run at $80. Oil has been declining over the last week as demand forecasts have been pared back, OPEC and the IEA have warned of oversupply in the coming months and the US has attempted to coordinate an SPR release with China and others. The market still remains fundamentally in a good position but lockdowns are now an obvious risk to this if other countries follow Austria's lead. A move below $80 could deepen the correction, perhaps pulling the price back towards the mid-$70 region. This looks more likely now than it did a day ago and if Germany announces similar measures, it could be the catalyst for such a move. Perhaps OPEC+ knows what it's talking about after all. Looking at To the day ahead now, there is no macro news; central bank speakers include ECB President Lagarde, Bundesbank President Weidmann, Fed Vice Chair Clarida, the Fed’s Waller and BoE Chief Economist Pill. Separately, data highlights include UK retail sales and German PPI for October. Market Snapshot S&P 500 futures down 0.09% to 4,696.25 STOXX Europe 600 up 0.2% to 488.66 MXAP little changed at 199.11 MXAPJ down 0.2% to 648.18 Nikkei up 0.5% to 29,745.87 Topix up 0.4% to 2,044.53 Hang Seng Index down 1.1% to 25,049.97 Shanghai Composite up 1.1% to 3,560.37 Sensex down 0.6% to 59,636.01 Australia S&P/ASX 200 up 0.2% to 7,396.55 Kospi up 0.8% to 2,971.02 Brent Futures little changed at $81.17/bbl Gold spot up 0.1% to $1,860.34 U.S. Dollar Index up 0.43% to 95.96 German 10Y yield little changed at -0.32% Euro down 0.6% to $1.1304 Top Overnight News from Bloomberg Germany’s Covid crisis is about to go from bad to worse, setting the stage for a grim Christmas in Europe. With infections surging relentlessly and authorities slow to act amid a change in power, experts warn that serious cases and deaths will keep climbing Austria will enter a nationwide lockdown from Monday as a record spike in coronavirus cases threatens to overwhelm the country’s health care system The pundits are coming for the Fed and Chair Jerome Powell. Mohamed El-Erian, chief economic adviser to Allianz SE and a Bloomberg Opinion columnist, recently said the central bank has made one of the worst inflation calls in its history. Writing in the Financial Times, the economist Willem Buiter called on the Fed to abandon the more flexible inflation target it established last year Bitcoin continued its slide Thursday, falling for a fifth consecutive day as it slipped below $57,000 for the first time since October, in a retreat from record highs. The world’s largest cryptocurrency hasn’t slumped that long since the five days that ended May 16 House Democrats pushed expected passage of President Joe Biden’s $1.64 trillion economic agenda to Friday as Republican leader Kevin McCarthy delayed a vote with a lengthy floor speech that lasted into the early morning hours ECB President Christine Lagarde said policy makers “must not rush into a premature tightening when faced with passing or supply- driven inflation shocks” Markets are increasingly nervous about the common currency with the pandemic resurgent, geopolitical tensions rising and gas supply issues mounting A more detailed look at global markets courtesy of Newsquawk Asia-Pac stocks traded mostly positive after the mixed performance stateside where the S&P 500 and Nasdaq notched fresh record closes, but cyclicals lagged as comments from Senator Manchin cast some uncertainty on the Build Back Better bill. The ASX 200 (+0.2%) was rangebound with upside in healthcare and consumer stocks offset by weakness in tech and a lacklustre mining sector. Crown Resorts (CWN AT) was the stellar performer after it received an unsolicited, non-binding takeover proposal from Blackstone (BX) valued at AUD 12.50/shr which boosted its shares by around 16%, although gains in the broader market were limited as COVID-19 concerns lingered following a further jump of cases in Victoria state. The Nikkei 225 (+0.5%) benefitted from a mostly weaker currency and after PM Kishida confirmed the details of the incoming stimulus package valued at a total JPY 79tln including JPY 56tln in fiscal spending. The KOSPI (+0.8%) was also positive but with gains initially capped as South Korean wholesale inflation surged to a 13-year high and further added to the case for the BoK to hike rates for the second time this year at next week’s meeting. The Hang Seng (-1.1%) and Shanghai Comp. (+1.1%) were mixed with the mainland kept afloat amid press reports that China is considering measures to reduce taxes and fees by up to CNY 500bln, although the mainland was initially slow to start after another liquidity drain by the PBoC and with stocks in Hong Kong spooked amid substantial losses in Alibaba following a miss on its earnings and Country Garden Services suffered on reopening from the announcement of a 150mln-share placement. Finally, 10yr JGBs were rangebound with mild gains seen after the modest bull flattening stateside, but with upside restricted amid the gains in Japanese stocks and lack of BoJ purchases, as well as the incoming fiscal spending and extra budget from the Kishida government. Top Asian News Bitcoin Falls Almost 20% Since Record as Crypto Bulls Retreat Singapore’s Insignia Ventures Intensifies Push Into Healthtech Binance Chief Zhao Buys His First Home in ‘Pro-Crypto’ Dubai Property Stocks Surge; Land Sale Rules Eased: Evergrande Update The earlier positive sentiment in Europe dissipated amid a string of back-to-back downbeat COVID updates – with Austria now resorting to a full-scale lockdown and Germany sounding alarms over their domestic COVID situation and not ruling out its own lockdown. European bourses flipped from the mostly positive trade at the open to a negative picture (Euro Stoxx 50 -0.5%; Stoxx 600 Unch), with headlines also flagging the European stock market volatility gauge jumping to three-week highs. It is also worth noting the monthly option expiries for stocks today, with desks pointing to the second-largest expiry day on record. US equity futures have also seen headwinds from the pullback in Europe, but US futures are mixed with the NQ (+0.4%) benefitting from the slide in yields. Back to Europe, Austria’s ATX (-1.0%) sit as the laggard after the Austrian Chancellor said a full domestic COVID lockdown will be imposed as of Monday for a maximum of 20 days with compulsory vaccination from 1st February 2022. Switzerland’s SMI (+0.2%) owes its gains to the defensive flows into healthcare propping up heavyweights Novartis (+0.5%) and Roche (+0.7%). Sectors overall are mostly negative with Healthcare the current winner, whilst Tech benefits from the yield slump and Basic Resources recover from yesterday’s slide as base metals rebound. The downside sees Banks on yield dynamics, whilst Oil & Gas lost the ranks as crude prices were spooked by the COVID headlines emanating from Europe. In terms of individual movers, Ocado (+6%) resides at the top of the FTSE 100 – with some citing a Deutsche Bank note which suggested shareholder Marks & Spencer could be mulling a buyout, although the note is seemingly speculation as opposed to chatter. Top European News Ryanair Drops London Listing Over Brexit Compliance Hassles ECB Mustn’t Tighten Despite ‘Painful’ Inflation, Lagarde Says Austria to Lock Down, Impose Compulsory Covid Vaccinations German Covid Measures May Bolster ECB Stimulus Stance: El-Erian In FX, it remains to be seen whether the Dollar can continue to climb having descended from the summit, and with no obvious fundamental drivers on the agenda in terms of US data that has been instrumental, if not quite wholly responsible for the recent bull run. However, external and technical factors may provide the Greenback and index with enough momentum to rebound further, as the COVID-19 situation continues to deteriorate in certain parts of Europe especially. Meanwhile, the mere fact that the DXY bounced off a shallower low and appears to have formed a base above 95.500 is encouraging from a chart perspective, and only the Yen as a safer haven is arguably capping the index ahead of the aforementioned w-t-d peak within 95.554-96.090 extremes. Ahead, more Fed rhetoric and this time via Waller and Clarida. EUR - The Euro has been hit hardest by the Greenback revival, but also the latest pandemic waves that have forced Austria into total lockdown and are threatening to see Germany follow suit. Moreover, EGBs are front-running the latest squeeze amidst risk-off trade in stocks, oil and other commodities to widen spreads vs Treasuries and the divergence between the ECB/Fed and other more hawkishly or less dovishly positioned. Hence, Eur/Usd has reversed further from circa 1.1374 through 1.1350 and 1.1300, while Eur/Yen is eyeing 128.50 vs almost 130.00 at one stage and Eur/Chf is probing fresh multi-year lows around 1.0450. NZD/GBP/AUD/CAD - All catching contagion due to their high beta, cyclical or activity currency stature, with the Kiwi back under 0.7000, Pound hovering fractionally above 1.3400, Aussie beneath 0.7250 and Loonie striving to contain declines beyond 1.2650 pre-Canadian retail sales against the backdrop of collapsing crude prices. JPY/CHF - As noted above, the Yen is offering a bit more protection than its US counterpart and clearly benefiting from the weakness in global bond yields until JGBs catch up, with Usd/Jpy down from 114.50+ towards 113.80, but the Franc is showing its allure as a port in the storm via the Euro cross rather than vs the Buck as Usd/Chf holds above 0.9250. In commodities, WTI and Brent front month futures retreated with the trigger point being back-to-back COVID updates – with Austria confirming a full-scale lockdown from Monday and Germany not ruling out its own lockdown. Crude futures reacted to the prospect of a slowdown in activity translating to softer demand. That being said, COVID only represents one factor in the supply/demand equation. Oil consuming nations are ramping up rhetoric and are urging OPEC+ to release oil. The White House confirmed the US discussed a possible joint release of oil from reserves with China and other countries, while it reiterated that it has raised the need for available oil supply in the market with OPEC. Meanwhile, the Japanese Cabinet said it will urge oil-producing nations to increase output and work closely with the IEA amid risks from energy costs. Further, energy journalists have also been flagging jitters of Chinese crude demand amid the likelihood of another tax probe into independent refiners. All in all, a day of compounding bearish updates (thus far) has prompted the contracts to erase all of their APAC gains, with WTI Dec just above USD 76/bbl (76.06-79.33/bbl range) and Brent Jan back under USD 79/bbl (78.75-82.24/bbl range). Elsewhere, spot gold saw a pop higher around the flurry of European COVID updates and despite a firmer Buck – pointing to haven flows into the yellow metal – which is nonetheless struggling to convincingly sustain a breach its overnight highs around USD 1,860/oz and we are attentive to a key fib at USD 1876/oz. Base metals prices are relatively mixed but have waned off best levels amid the risk aversion that crept into the markets, but LME copper holds onto a USD 9,500+/t status. US Event Calendar Nothing major scheduled Central Banks 10:45am: Fed’s Waller Discusses the Economic Outlook 12:15pm: Fed’s Clarida Discusses Global Monetary Policy Coordination DB's Jim Reid concludes the overnight wrap It was another mixed session for markets yesterday, with equities and other assets continuing to trade around their recent highs even as a number of risk factors were increasingly piling up on the horizon. By the close of trade, the S&P 500 had advanced +0.34% to put the index at its all-time high, whilst oil prices pared back their losses from earlier in the day to move higher. That said, there was more of a risk-off tone in Europe as the latest Covid wave continues to gather pace, with the STOXX 600 (-0.46%) snapping a run of 6 successive gains and being up on 17 out of the previous 19 days as it fell back from its all-time high the previous day, as haven assets including sovereign bonds were the beneficiaries. Starting with those equity moves, it was difficult to characterise yesterday’s session in some ways, since although the S&P advanced +0.34%, it was driven by a relatively narrow group of sectors, with only a third of the index’s components actually moving higher on the day. Indeed, to find a bigger increase in the S&P 500 on fewer advancing companies, one needs to go back to March 2000 (though it came close one day in August 2020, when the index advanced +0.32% on 153 advancing companies). Consumer discretionary (+1.49%) and tech (+1.02%) stocks were the only sectors to materially advance. Nvidia (+8.25%), the world’s largest chipmaker, was a key outperformer, and posted very strong third quarter earnings and revised higher fourth quarter guidance. Following the strong day, Nvidia jumped into the top ten S&P 500 companies by market cap, ending yesterday at number eight. The S&P gain may have been so narrow due to some negative chatter about President Biden’s build back better package, with CNN’s Manu Raju tweeting that Senator Joe Manchin “just told me he has NOT decided on whether to vote to proceed to the Build Back Better bill.” Manchin’s position in a 50-50 senate has given him an enormous amount of influence, and separate comments created another set of headlines yesterday on the Fed Chair decision, after The Hill reported Manchin saying that he’s “looking very favourably” at supporting Chair Powell if he were re-nominated, following a chat between the two about inflation. Mr Manchin is seemingly one of the most powerful people in the world at the moment. While the Senate still presents a hurdle for the President’s build back better bill, House Democrats are close to voting on the bill but couldn’t last night due to a three hour speech by House Republican leader McCarthy. It will probably happen this morning. This follows the Congressional Budget Office’s ‘score’ of the bill, which suggested the deficit would increase by $367bn as a result of the bill, higher figures than the White House suggested, but low enough to garner support from moderate House Democrats. Over in Europe there was a much weaker session yesterday, with the major equity indices falling across the continent amidst mounting concern over the Covid-19 pandemic. Germany is making another forceful push to combat the recent increase in cases, including expanded vaccination efforts, encouraging work from home, and restricting public transportation for unvaccinated individuals. Elsewhere, the Czech Republic’s government said that certain activities will be limited to those who’ve been vaccinated or had the virus in the last six months, including access to restaurants and hairdressers. Slovakia also agreed a similar move to prevent the unvaccinated accessing shopping malls, whilst Hungary is expanding its mask mandate to indoor spaces from Monday. Greece imposed further restrictions for its unvaccinated population. So a theme of placing more of the restrictions in Europe on the unvaccinated at the moment and trying to protect the freedoms of those jabbed for as long as possible. That risk-off tone supported sovereign bonds in Europe, with yields on 10yr bunds (-3.0bps), OATs (-4.1bps) and BTPs (-5.5bps) all moving lower. That was a larger decline relative to the US, where yields on 10yr Treasuries were only down -0.3bps to 1.59%, with lower real yields driving the decline. One asset class with some pretty sizeable moves yesterday was FX, where a bunch of separate headlines led to various currencies hitting multi-year records. Among the G10 currencies, the Swiss Franc hit its strongest level against the euro in over 6 years yesterday on an intraday basis. That came as the Covid wave has strengthened demand for haven assets, though it went on to weaken later in the day to close down -0.15%. Meanwhile, the Norwegian Krone was the weakest G10 performer (-0.72% vs USD) after the Norges Bank said it would be stopping its daily foreign exchange sales on behalf of the government for the rest of the month. Finally in EM there were some even bigger shifts, with the Turkish Lira falling to a record low against the US dollar, which follows the central bank’s decision to cut interest rates by 100bps, in line with expectations. And then in South Africa, the Rand also fell to its weakest in over a year, in spite of the central bank’s decision to hike rates, after the decision was interpreted dovishly. Overnight in Asia stocks are trading mostly higher led by the Nikkei (+0.45%), KOSPI (+0.43%), Shanghai Composite (+0.34%) and CSI (+0.18%). The Hang Seng (-1.76%) is sharply lower and fairly broad based but is being especially dragged down by Alibaba which dived -11% after it downgraded its outlook for fiscal year 2022 and missed sales estimate for the second quarter. Elsewhere in Japan headline CPI for October came in at +0.1% year-on-year (+0.2% consensus & +0.2% previous) while core CPI matched expectations at +0.1% year-on-year. The numbers reflect plunging mobile phone fees offsetting a 21% surge in gas prices. If the low mobile phone costs are stripped out, core inflation would be at 1.7% according to a Bloomberg calculation. Prime Minister Fumio Kishida is expected to deliver a bigger than expected stimulus package worth YEN 78.9 trillion ($690 bn) according to Bloomberg. We should know more tomorrow. Moving on futures are pointing to a positive start in US and Europe with S&P 500 (+0.42%) and DAX (+0.39%) futures both up. Turning to commodities, oil prices had been on track to move lower before paring back those losses, with Brent Crude (+1.20%) and WTI (+0.83%) both up by the close and edging up around half this amount again in Asia. That comes amidst continued chatter regarding strategic oil releases, and follows comments from a spokeswoman from China’s National Food and Strategic Reserves Administration, who Reuters reported as saying that they were releasing crude oil reserves. New York Fed President, and Vice Chair of the FOMC, John Williams, upgraded his assessment of inflation in public remarks yesterday. A heretofore stalwart member of team transitory, he noted that they wouldn’t want to see inflation expectations move much higher from here, and that recent price pressures have been broad-based, driving underlying inflation higher. Williams is one of the so-called core members of FOMC leadership, so his view carries some weight and is a useful barometer of momentum within the FOMC. Indeed, Chicago Fed President Evans, one of the most resolutely dovish Fed Presidents, expressed similar sentiment, recognising that rate hikes may need to come as early as 2022 given the circumstances. There wasn’t much in the way of data yesterday, though the weekly initial jobless claims from the US for the week through November 13 came in higher than expected at 268k (vs. 260k expected), and the previous week’s reading was also revised up +2k. That said, the 4-week moving average now stands at a post-pandemic low of 272.75k. Otherwise, the Philadelphia Fed’s manufacturing business outlook survey surprised to the upside at 39.0 in November (vs. 24.0 expected), the highest since April. That had signs of price pressures persisting, with prices paid up to 80.0, the highest since June, and prices received up to 62.9, the highest since June 1974. Finally, the Kansas City Fed’s manufacturing index for November fell to 24 (vs. 28 expected). To the day ahead now, and central bank speakers include ECB President Lagarde, Bundesbank President Weidmann, Fed Vice Chair Clarida, the Fed’s Waller and BoE Chief Economist Pill. Separately, data highlights include UK retail sales and German PPI for October. Tyler Durden Fri, 11/19/2021 - 08:11.....»»

Category: personnelSource: nytNov 19th, 2021

A Federal court dismissed a class action lawsuit by retail investors claiming Citadel Securities and Robinhood conspired to halt GameStop trading

The District Court judge said the conversations were "suspicious" but not enough to prove a conspiracy against retail investors. In this photo illustration the WallStreetBets page seen in the background of a silhouette hand holding a mobile phone with Reddit logo.Photo Illustration by Rafael Henrique/SOPA Images/LightRocket via Getty Images A Miami district court dismissed the retail-investor lawsuit against Robinhood and Citadel Securities. The lawsuit claimed the two firms conspired to halt meme-stock trading on January 28. The district court judge said the conversations were "suspicious" but not enough to prove wrongdoing. A federal court in Miami dismissed a lawsuit Wednesday brought by retail investors alleging Citadel Securities and Robinhood conspired to halt meme-stock trading in January. The court said the evidence of a conspiracy between market-maker Citadel Securities, trading app Robinhood, and others, to cause shares of meme stocks like GameStop to decline on January 28 was not sufficient. In September, the retail investors suing the companies submitted new evidence in their complaint that revealed conversations between Citadel Securities and Robinhood in the days leading up to the trading halt."High level employees of Citadel Securities and Robinhood had numerous communications with each other that indicate that Citadel applied pressure on Robinhood," the lawsuit said.But those conversations did not convince the District Court of Southern Florida."Admittedly, these emails may be somewhat suspicious given the participants and their timing," Chief US District Judge Cecilia Altonaga wrote. "But are a few vague and ambiguous emails between two firms in an otherwise lawful, ongoing business relationship enough to 'nudge [Plaintiffs'] claims across the line from conceivable to plausible[?]' The Court thinks not." In an emailed statement, a Citadel Securities spokesperson said, "We are pleased that the court agreed that there is no basis for the plaintiffs' conspiracy theories and summarily dismissed the case."Several lawyers representing retail investors did not immediately respond to Insider's request for comment. Retail investors have until December 20 to file a final amended complaint. When the conversations were revealed in September, the hashtag #CitadelScandal trended on Twitter amid renewed outrage from retail traders. Citadel Securities fired back on Twitter saying retail traders concocted an "absurd" story."Internet conspiracies and Twitter mobs try to ignore the facts, but the fact is that Citadel Securities was the pre-eminent market maker to the retail brokerage community in January 2021," the company wrote.In addition to lawsuits brought by aggrieved retail investors, the January trading halt prompted a report from the US Securities and Exchange Commission as well as Congressional hearings in which Robinhood Chief Executive Officer Vlad Tenev and Citadel Securities CEO Ken Griffin testified. Robinhood also made changes to its platform, adding round-the-clock phone support and nixing a popular confetti feature.Read the original article on Business Insider.....»»

Category: topSource: businessinsiderNov 18th, 2021

"The Big Short" investor Michael Burry has bet against Tesla stock, said it"s a bubble about to burst, and called out Elon Musk for selling shares

Burry has ridiculed Tesla's valuation and accused Musk of selling stock because he knows it's overpriced. Musk dismissed him as a "broken clock." Michael Burry and Elon Musk.Jim Spellman; Pool / Getty Images Michael Burry has ridiculed Tesla's valuation and suggested Elon Musk knows the stock is overpriced. The "Big Short" investor's fiery comments led Musk to call him a "broken clock" this week. Here are Burry's best tweets about Musk, Tesla, and the electric-vehicle boom. Michael Burry has publicly bet against Tesla, described the automaker's stock as a bubble about to burst, and accused CEO Elon Musk of selling his company's shares not because he wants to pay taxes or appease regulators but because he knows they're overvalued.The investor of "The Big Short" fame clearly irritated Musk, as the Tesla chief dismissed him as a "broken clock" this week. Burry promptly deleted his remaining tweets and took down his Twitter account.Here are Burry's 12 best tweets about Tesla, Musk, and the electric-vehicle boom:1. "What do $TSLA, $BTC, option gamma traders have in common? Rhymes with Rubble." — November 20202. "So, @elonmusk, yes, I'm short $TSLA, but some free advice for a good guy ... Seriously, issue 25-50% of your shares at the current ridiculous price. That's not dilution. You'd be cementing permanence and untold optionality. If there are buyers, sell that #TeslaSouffle." — December 20203. "Well, my last Big Short got bigger and Bigger and BIGGER too ... $TSLA $60 billion increase in market cap today alone ... 1 GM, 2 Hersheys, 3 Etsys, 4 Dominos, 10 Vornados ... Enjoy it while it lasts." — January 20214. "$TSLA below $100/share by later this year will not crash the system. There is no reflexivity in such a fall. But it would trigger the end of an era for a certain type of investing." — February 20215. "$TSLA and $BTC correlation coefficient is 0.951967 over the last six months. @elonmusk going for perfect unity? Nah, Elon dreams the impossible. He is determined to break unity. Correlation > 1. And he has history on his side. $TSLA and $BTC investors can make anything happen." — February 20216. "Chinese regulators summon Tesla on quality issues as consumers complain about quality ... but $TSLA bought $BTC. In my mind's eye, so much #digitalconfetti." — February 20217. "In the SF Bay Area, $TSLA vehicles are everywhere. May need two hands to count them at a stop light. Everyone I know owns 1+, though some have gone back to ICE. I've talked to industry players, down to the mechanics. Remarkably similar to 1999 and 2006." — February 20218. "Fads today (#BTC, #EV, SAAS #memestocks) are like housing in 2007 and fiber/.com/comm/routers in 1999. On the whole, not wrong, just driven by speculative fervor to insane heights from which the fall will be dramatic and painful." — March 20219. "Regarding what @elonmusk NEEDS to sell because of the proposed unrealized gains tax, or to #solveworldhunger, or ... well, there is the matter of the tax-free cash he took out in the form of personal loans backed by 88.3 million of his shares at June 30th." — November 202110. "Can $TSLA fall 80, 90%? After 2000, many high flyers did. $AMZN fell 95% 2 decades ago, changed its whole biz, and thrived much later. May 1, 2020 - $TSLA at $163/share is 'too high' and he was not kidding, said @elonmusk." — November 202111. "No, @elonmusk, the true test is achieving that without massive government and electricity subsidies on the backs of taxpayers who don't own your cars." — November 202112. "Let's face it. @elonmusk borrowed against 88.3 million shares, sold all his mansions, moved to Texas, and is asking @BernieSanders whether he should sell more stock. He doesn't need cash. He just wants to sell $TSLA." — November 2021Read more: The creator of a Michael Burry subreddit explains why 'The Big Short' investor's selling spree is a huge red flag — and lays out why it's a major endorsement for the few stocks he has leftRead the original article on Business Insider.....»»

Category: topSource: businessinsiderNov 18th, 2021

Futures Rise To 4,700 "Max Gamma" As Oil Slide Accelerates

Futures Rise To 4,700 "Max Gamma" As Oil Slide Accelerates U.S. index futures rose again, trading on top of the massive 4700 "max gamma" level despite downbeat data out of Chinese tech names, as investors awaited the latest batch of unemployment data and taking comfort from signals that central banks will stay far behind the curve and keep pledges to overlook faster inflation rather than rush into rate hikes. European stocks were steady and Asian equities fell as Chinese tech stocks tumbled after poor results from Baidu and Bilibili. Treasury yields edged higher, the dollar was little changed and gold declined. Bitcoin retreated for a fifth straight day. Oil prices skidded to a six-week low on concern about a supply overhang and the prospect of China, Japan and the United States dipping in to their fuel reserves, with Brent futures last at $79.77, more than 8% off last month's three-year high. Nasdaq futures rose 86.25 points or 0.53% outperforming S&P 500 futs which were up 11.50 points or 0.25% to 4697.75, after chip giant Nvidia jumped 7% after a sales forecast by the world’s largest chipmaker. Elsewhere in premarket trading, Cisco dropped 6.6% after the computer networking equipment group’s growth and earnings forecast fell short of expectations while Alibaba slid after reporting sales that missed analyst estimates for a second straight quarter. Some other notable premarket movers: EV makers are mixed in U.S. premarket trading, with Rivian Automotive (RIVN US), Lucid (LCID US) and Canoo (GOEV US) all declining and newly-listed Sono (SEV US) extending its bounce Nvidia (NVDA US) shares gain 7% in U.S. premarket trading, with analysts saying the chipmaker delivered a strong enough quarter to justify its punchy valuation Amtech (ASYS US) fell 22% in post-market trading after reporting fourth quarter revenue that missed estimates from two analysts. The semiconductor stock has risen 139% this year through Wednesday’s trading. Kraft Heinz (KHC US) fell 1.6% in postmarket trading on Wednesday after announcing one of its top holders was selling a portion of its stake. Victoria’s Secret (VSCO US) shares gain 13% in U.S. premarket trading as analysts highlight “better-than- feared” 3Q results for the lingerie retailer. JD.com (JD US) shares advanced 2.2% premarket after it reported net revenue for the third quarter that beat the average analyst estimate. “While companies are managing to report solid third-quarter numbers, the ability to do so is being tempered by concerns about slimmer margins,” said Michael Hewson, chief market analyst at CMC Markets in London. “One positive thing, aside from the concern over rising inflation, has been the resilience of labor markets, on both sides of the Atlantic.” The Stoxx Europe 600 Index was little changed with most cash indexes giving back early gains or losses to trade flat as travel and consumer companies gained while the energy and minings industries retreated. FTSE 100 underperformed slightly. Oil & gas was the weakest sector followed by mining stocks. European metals and mining stocks fall 0.8%, the second worst performing sub-index on the benchmark Stoxx 600, amid sinking iron ore futures and copper prices. Iron ore retreated as investors weighed a top producer’s forecasts of a balanced market next year and the impact on miners amid a price collapse in recent months. Diversified miners drop, Glencore -0.8%, Anglo American -1%, BHP -0.7%, Rio Tinto -1.1%; the four stocks account for more than 60% of the SXPP. Earlier in the session, Asian stocks fell, on track for a second day of losses, as Baidu helped lead a slump in Chinese technology giants.  The MSCI Asia Pacific Index dropped as much as 0.4%, extending its two-day slide to about 0.9%. The Hang Seng Tech Index lost about 3%, as search engine giant Baidu tumbled on worries over the advertising outlook and video-streaming firm Bilibili dropped after posting a larger-than-expected loss. Hong Kong’s Hang Seng Index and China’s CSI 300 benchmark were the worst performing national benchmarks Thursday, while Taiwan’s Taiex managed a small gain. Alibaba also fell, ahead of its highly awaited earnings report later today that may show the impact of Beijing’s regulatory curbs. Japan's Nikkei was down 0.6% in early trade. "We do seem to have stalled somewhat as we head into the year end," said Jun Bei Liu, a portfolio manager at Tribeca Investment Partners in Sydney. "Investors perhaps are just taking a bit of pause," she said, in the wake of a strong U.S. results season, but as inflation and China's slowdown loom as macroeconomic headwinds. “With a bout of earnings having been released and put behind the market, we’re in an environment where investors are inclined to take profits,” said Takashi Ito, an equity market strategist at Nomura Securities in Tokyo. “Investors are likely to cherry pick stocks that have high earnings and ROE and have strong momentum for growth.”  The region’s equities are now poised for a weekly drop after wiping out gains from earlier this week. Anxiety over global inflation has weighed on sentiment as investors search for clues on when central banks will start raising interest rates. Indonesia and the Philippines kept borrowing costs unchanged, as expected, to aid two economies that bore the brunt of Covid-19 outbreaks in Southeast Asia this year. In rates, treasuries were slightly cheaper across long-end of the curve after S&P 500 and Nasdaq 100 futures breached Wednesday’s highs. Yields are higher by ~1bp in 30-year sector, with 2s10s steeper by ~1bp, 5s30s by ~0.5bp; 10-year is ~1.60%, trailing bunds by ~2bp as traders push back on ECB rate-hike pricing. Focal points Thursday include several Fed speakers and a potentially historic 10-year TIPS auction at 1pm ET - at $14BN, the 10Y TIPS reopening is poised to draw a record low yield near -1.14%; breakeven inflation rate at ~2.71% is within 7bp of Monday’s YTD high. Elsewhere, Gilts outperformed richening ~2.5bps across the curve. Peripheral spreads tighten, semi-core widens marginally. In FX, the U.S. dollar erased an earlier modest loss and was flat, with majors mostly range-bound. Treasury yields stabilized from overnight declines; the greenback traded mixed versus its Group-of-10 peers, though most were confined to tight ranges, New Zealand’s dollar led G-10 gains after two-year ahead inflation expectations rose to 2.96% in the fourth quarter from 2.27% in the third, according to survey of businesses published by the Reserve Bank of New Zealand. Support in euro- Swiss franc at 1.0500 holds for now and consolidation for risk reversals this week suggests that a breach of the key level may not see a big follow through. The pound inched up and is on its longest winning streak in nearly seven months after this week’s jobs and inflation data fueled confidence that the Bank of England will hike rates. The Turkish lira plunged to a new all time low, with the USDTRY rising to 10.93 after the central bank cut rates by 100bps. Currency traders are also assessing a sharp downdraft in the Aussie/yen cross, often a barometer of market sentiment. It fell through its 200-day moving average on Tuesday and has lost almost 4% in a dozen sessions . "You've got the perfect storm there for bears," said Matt Simpson, senior analyst at brokerage City Index. "Fundamentally and technically Aussie/yen looks pretty good with lower oil prices." In commodities, crude futures remained in the red but bounce off worst levels as the potential for SPR releases remains center stage. WTI finds support near $77, recovering toward $78; Brent regains a $80-handle. Spot gold gives back Asia’s small gains, dropping ~$7 to trade near $1,860/oz. Base metals trade poorly, LME zinc and lead underperform. Looking at the day ahead now, and data releases from the US include the weekly initial jobless claims, the Philadelphia Fed’s business outlook for November, the Kansas City Fed’s manufacturing index for November, and the Conference Board’s leading index for October. Central bank speakers include PBoC Governor Yi Gang, the ECB’s Centeno, Panetta and Lane, and the Fed’s Bostic, Williams, Evans and Daly. There’ll also be a number of decisions from EM central banks, including Bank Indonesia, the Central Bank of Turkey and the South African Reserve Bank. Finally, earnings releases include Intuit, Applied Materials and TJX. Market Snapshot S&P 500 futures up 0.4% to 4,703.25 STOXX Europe 600 up 0.1% to 490.50 MXAP down 0.3% to 199.31 MXAPJ down 0.6% to 650.79 Nikkei down 0.3% to 29,598.66 Topix down 0.1% to 2,035.52 Hang Seng Index down 1.3% to 25,319.72 Shanghai Composite down 0.5% to 3,520.71 Sensex down 0.4% to 59,755.91 Australia S&P/ASX 200 up 0.1% to 7,379.20 Kospi down 0.5% to 2,947.38 Brent Futures down 0.1% to $80.18/bbl Gold spot down 0.2% to $1,863.45 U.S. Dollar Index little changed at 95.75 German 10Y yield little changed at -0.26% Euro little changed at $1.1327 Top Overnight News from Bloomberg More Wall Street banks are wagering that the Federal Reserve will hike rates at a faster-than-expected pace, with Citigroup Inc. joining Morgan Stanley in backing trades that will profit if the central bank does just that China is releasing some oil from its strategic reserves days after the U.S. invited it to participate in a joint sale, suggesting the world’s two biggest oil consumers are willing to work together to keep a lid on energy costs European countries are increasingly forcing reluctant companies to let employees work from home in an effort to break the rapidly spreading fourth wave of the coronavirus pandemic A more in depth look at global markets courtesy of Newsqauwk Asia-Pac stocks traded mostly negative with sentiment in the region subdued amid a lack of significant macro drivers and following the uninspired lead from the US - where the major indices finished a choppy session in the red and the DJIA gave up the 36k status. Nonetheless, the ASX 200 (+0.1%) remained afloat with notable strength in gold miners, as well as some consumer stocks, although advances in the index were limited by losses in the financial and energy sectors after similar underperformance stateside amid a decline in yields and oil prices. The Nikkei 225 (-0.3%) was initially dragged lower by unfavourable currency inflows which overshadowed reports that Japan wants to enhance tax breaks for corporations that raise wages, while shares in Eisai were hit after EU regulators placed doubts regarding the approval of Co. and Biogen’s co-developed Alzheimer’s drug and SoftBank also declined after the US regulator raised concerns regarding Nvidia’s acquisition of Arm. However, the index then briefly returned flat in late trade on reports that the Japanese stimulus package is to require JPY 55.7tln of fiscal spending which is higher than the previously speculated of around JPY 40tln. The Hang Seng (-1.3%) and Shanghai Comp. (-0.5%) weakened after another liquidity drain by the PBoC and with the declines in Hong Kong exacerbated by tech selling, while the losses in the mainland were to a lesser extent with China said to be mulling additional industrial policies aimed to support growth and SGH Macro sources suggested the US and China agreed there would be some substantial progress on trade such as the removal of some punitive tariffs by the US and increased purchases of US products by China, although the report highlighted that it was unclear if this would be from a high-profile announcement or a discrete relaxing of tariffs. Finally, 10yr JGBs were initially flat as prices failed to benefit from the subdued risk appetite in Japan and rebound in global peers, while firmer metrics at the 20yr JGB bond auction provided a mild tailwind in late trade although the support was only brief and prices were then pressured on news of the potentially larger than anticipated fiscal spending in PM Kishida's stimulus package. Top Asian News China Property Stocks Sink, $4.2 Billion Rush: Evergrande Update Japan’s Kishida Eyes Record Fiscal Firepower to Boost Recovery China Property Firm Shinsun’s Shares and Bonds Slump JD.com Sales Beat Estimates as Investments Start to Pay Off Major bourses in Europe are choppy, although sentiment picked up following a subdued APAC session but despite a distinct lack of fresh catalysts. US equity futures have also been grinding higher in early European hours, with the NQ (+0.6%) outpacing the ES (+0.3%), RTY (+0.2%) and YM (+0.2%). Back to European cash – broad-based gains are seen across the Euro bourses – which lifted the CAC, DAX and SMI to notch record intraday highs, whilst upside in the UK's FTSE 100 (-0.2%) has been hampered by hefty losses in today's lagging sectors– the Energy and Basic Resources - amid price action in the respective markets. Tech names also see a strong performance thus far as chip names cheer NVIDIA (+6% pre-market) earnings yesterday. Overall, sectors have maintained a similarly mixed picture vs the cash open, with no overarching theme. In terms of individual movers, Swatch (+2.8%) and Richemont (+0.6) piggyback on the increase in Swiss Watch Exports vs 2020 and 2019. Metro Bank (-20%) plumbed the depths after terminating takeover talks with Carlyle. Top European News Royal Mail Hands Investors $540 Million Amid Parcel Surge German Coalition Plans Stricter Rent Increase Regulation: Bild HSBC Sees ECB Sticking With Easy Stance Despite Record Inflation Astra Covid Antibody Data Shows Long-Lasting Protection In FX, the Kiwi has extended its recovery on heightened RBNZ tightening expectations prompted by significant increases in Q4 inflation projections, with some pundits now assigning a greater probability to the OCR rising 50 bp compared to the 25 bp more generally forecast and factored in. Nzd/Usd is eyeing 0.7050 and the 50 DMA just above (at 0.7054 today) having breached the 100 DMA (0.7026), while the Aud/Nzd cross is probing further below 1.0350 even though the Aussie has found some support into 0.7250 against its US rival and will be encouraged by news that COVID-19 restrictions in the state of Victoria are on the verge of being completely lifted. GBP/EUR/DXY - Notwithstanding Kiwi outperformance, the Dollar has lost a bit more of its bullish momentum to the benefit of most rivals, and several of those that compose the basket. Indeed, Cable has popped above 1.3500, while the Euro is looking more comfortable on the 1.1300 handle as the index retreats further from Wednesday’s new y-t-d peak and away from the psychological 96.000 level into a 95.840-642 range. Ahead, IJC and Philly Fed are due amidst another decent slate of Fed speakers, while Eur/Usd will also be eyeing the latest ECB orators for some direction and Eur/Gbp is back around 0.8400 where decent option expiry interest resides (1.1 bn), but perhaps more focused on latest talks between the UK and EU on the NI dispute. CHF/CAD/JPY - The Franc has pared more declines vs the Buck from sub-0.9300 and remains firm against the Euro near 1.0500 in wake of Swiss trade data showing a wider surplus and pick-up in key watch exports, but the Loonie looks a bit hampered by a more pronounced fall in the price of oil as the US calls on other countries for a concerted SPR tap and China is said to be working on the release of some crude stocks. Usd/Cad is tethered to 1.2600 and highly unlikely to threaten 1.1 bn option expiries at the 1.2500 strike in contrast to the Yen that stalled above 114.00 and could be restrained by 1.4 bn between 113.90 and the round number or 1.3 bn from 114.20-25, if not reports that Japan’s stimulus package may require Jpy 55.7 tn of fiscal spending compared to Jpy 40 tn previously speculated. In commodities, WTI and Brent front-month futures are off worst levels but still under pressure amid the prospect of looming crude reserves releases, with reports suggesting China is gearing up for its own release. There were also prior source reports that the US was said to have asked other countries to coordinate a release of strategic oil reserves and raised the oil reserve release request with Japan and China. Furthermore, the US tapping of the SPR could be either in the form of a sale and/or loan from the reserve, and the release from the reserve needs to be more than 20mln-30mln bbls to get the message to OPEC, while a source added that the US asked India, South Korea and large oil-consuming countries, but not European countries, to consider oil reserve releases after pleas to OPEC failed. This concoction of headlines guided Brent and WTI futures under USD 80/bbl and USD 78/bbl respectively with early selling also experienced as European players entered the fray. On the geopolitical front, US National security adviser Jake Sullivan raised with his Israeli counterpart the idea of an interim agreement with Iran to buy more time for nuclear negotiations, according to sources. However, two American sources familiar with the call said the officials were just "brainstorming" and that Sullivan passed along an idea put forward by a European ally. Next, participants should continue to expect jawboning from the larger economies that advocated OPEC+ to release more oil. OPEC+ is unlikely to react to prices ahead of next month's meeting (barring any shocks). Elsewhere, spot gold and silver have been choppy within a tight range. Spot gold trades under USD 1,875/oz - with technicians flagging a Fib around USD 1,876/oz. Spot silver trades on either side of USD 25/oz. Base metals are on a softer footing amid the broader performance across industrial commodities – LME copper remains subdued under the USD 9,500/t level, whilst some reports suggest companies are attempting to arbitrage the copper spread between Shanghai and London. US Event Calendar 8:30am: Nov. Initial Jobless Claims, est. 260,000, prior 267,000; Continuing Claims, est. 2.12m, prior 2.16m 8:30am: Nov. Philadelphia Fed Business Outl, est. 24.0, prior 23.8 9:45am: Nov. Langer Consumer Comfort, prior 50.3, revised 50.3 10am: Oct. Leading Index, est. 0.8%, prior 0.2% 11am: Nov. Kansas City Fed Manf. Activity, est. 28, prior 31 Central banks 8am: Fed’s Bostic Discusses Regional Outlook 9:30am: Fed’s Williams speaks on Transatlantic responses to pandemic 2pm: Fed’s Evans Takes Part in Moderated Q&A 3:30pm: Fed’s Daly takes part in Fed Listens event DB's Jim Reid concludes the overnight wrap After 9 weeks since surgery, yesterday I got the green light to play golf again from my consultant. Yippee. However he said that he’ll likely see me in 3-5 years to do a procedure called distal femoral osteotomy where he’ll break my femur and realign the leg over the good part of the knee. Basically I have a knee that is very good on the inside half and very bad on the outer lateral side. He’s patched the bad side up but it’s unlikely to last more than a few years before the arthritis becomes too painful. This operation would be aimed at delaying knee replacement for as long as possible! Sounds painful and a bit crazy! Meanwhile I also have a painful slipped disc in my back at the moment that I’m going to have an injection for to hopefully avoid surgery after years of managing it. As you might imagine from reading my posts last week I don’t get much sympathy at home at the moment for my various ailments. In terms of operations and golf I’m turning into a very very poor man’s Tiger Woods! Markets have been limping a bit over the last 24 hours too as the inflation realities seemed to be a bit more in focus. Those worries were given additional fuel from the UK CPI release for October, which followed the US and the Euro Area in delivering another upside surprise, just as a number of key agricultural prices continued to show significant strength. Oil was down notably though as we’ll discuss below. To add to the mix, the latest global Covid-19 wave has shown no sign of abating yet, even if some countries are better equipped for it than others. Starting with inflation, one of the main pieces of news arrived yesterday morning, when the UK reported that CPI came in at +4.2% year-on-year in October. That was above every economist’s estimate on Bloomberg, surpassing the +3.9% consensus expectation that was also the BoE’s staff projection in their November Monetary Policy Report. That’s the fastest UK inflation since 2011, and core inflation also surprised on the upside with a +3.4% reading (vs. +3.1% expected). In response to this, our UK economist (link here) is now expecting that CPI will peak at +5.4% in April, with the 2022 annual average CPI still at +4.2%, which is more than double the BoE’s 2% target. The release was also seen as strengthening the case for a December rate hike by the BoE, and sterling was the second best performing G10 currency after being top the day before in response, strengthening +0.45% against the US dollar. Even as inflation risks mounted however, the major equity indices demonstrated an impressive resilience, with the STOXX 600 (+0.14%) rising for the 17th time in the last 19 sessions. This is the best such streak since June this year, when the index managed to increase 18 of 20 days. We’ll see if that mark is matched today That was a better performance than the S&P 500 (-0.26%). 342 stocks were in the red today, the most in three weeks. Energy (-1.74%) and financials (-1.11%) each declined more than a percent, on lower oil prices and yields, respectively. Real estate (+0.65%) and consumer discretionary (+0.59%) led the way, driven by a +3.25% increase in Tesla. In line with the broad-based retreat, small-caps continued to put in a much weaker performance, with the Russell 2000 shedding -1.16% as it underperformed the S&P for a 4th consecutive session. Sovereign bonds also managed to advance yesterday, with yields on 10yr Treasuries (-4.5bps) posting their biggest decline in over a week, taking them to 1.59%. Declining inflation expectations drove that move, with the 10yr breakeven down -3.2bps to 2.71%, which was its biggest decline in over two weeks. For Europe it was a different story however, with yields on 10yr bunds only down -0.3bps, just as those on 10yr OATs (+0.1bps) and BTPs (+0.5bps) both moved higher. Most of the Treasury rally was after Europe closed though. Those moves came against the backdrop of a fairly divergent performance among commodities. On the one hand oil prices fell back, with WTI (-2.97%) closing beneath $80/bbl for only the second time in the last month as speculation continued that the US would tap its strategic reserves. On the other hand, there was no sign of any relenting in European natural gas prices, which rose a further +0.79% yesterday to bring their gains over the last 7 days to +31.57%. That follows the German regulator’s decision to temporarily suspend certification for Nord Stream 2, which has added to fears that Europe will face major supply issues over the winter. And while we’re discussing the factors fuelling inflation, there were some fresh moves higher in agricultural prices as well yesterday, with wheat futures (+1.48%) hitting an 8-year high, and coffee futures (+4.75%) climbing to their highest level in almost a decade. Central banks will be watching these trends closely. There’s still no word on who’s going to lead the Fed over the next 4 years, but yesterday’s news was that President Biden will make his pick by Thanksgiving. For those keeping track at home, on Tuesday the guidance was within the next four days. So, while it appears momentum toward an announcement is growing, take signaling of any particular day with a grain of salt. On the topic of the Fed, our US economists released their updated Fed outlook yesterday (link here) in which they brought forward their view of the expected liftoff to July 2022, with another rate increase following in Q4 2022. And although it’s not their base case, they acknowledge that incoming data could even push the Fed to speed up their taper and raise rates before June. They don’t see the choice of the next Fed Chair as having much impact on the broad policy trajectory, since inflation next year is likely to still be at high levels that makes most officials uncomfortable, plus the annual rotation of regional Fed presidents with an FOMC vote leans more hawkish next year. So that will constrain the extent to which a new chair could shift matters in a dovish direction, even if they wanted to. Overnight in Asia stocks are trading mostly in the red outside of a flat KOSPI (+0.01%). The Shanghai Composite (-0.13%), CSI (-0.64%), Nikkei (-0.77%) and Hang Seng (-1.35%) are being dragged down by tech after a bout of Chinese IT companies missed earnings continuing a theme of this earnings season. Elsewhere in Japan, the Nikkei reported that the new economic stimulus package could be around YEN 78.9 tn ($691 bn). Prime Minister Fumio Kishida will announce the package on Friday. Elsewhere S&P 500 (+0.08%) and DAX futures (+0.01%) both fairly flat. The House of Representatives is slated to begin debate on the Biden social and climate spending ‘build back better’ bill. Word from Congress suggested it could be tabled for a vote as soon as today, though the House has been as profligate missing self-imposed deadlines to vote on the bill as President Biden has been with the announcement of Fed Chair. In addition to the Build Back Better package, there’ll still be plenty of action in Congress over the next month, with another government shutdown looming on December 3, and then a debt ceiling deadline estimated on December 15. The House Budget Chair echoed Treasury Secretary Yellen’s exhortation, and urged Congress to raise the debt ceiling to avoid a government default. Treasury bills are pricing increasing debt ceiling uncertainty during December; yields on bills maturing from mid- to late-December are around double the yields of bills maturing in November and January. Turning to the pandemic, cases have continued to rise at the global level over recent days, as alarm grows in a number of countries about the potential extent of the winter wave. In Germany, Chancellor Merkel and Vice Chancellor Scholz are taking part in a video conference with state leaders today on the pandemic amidst a major surge in cases. And Sweden’s government said that they planned to bring in a requirement for vaccine passports at indoor events with more than 100 people. In better news however, the UK’s 7-day average of reported cases moved lower for the first time in a week yesterday. Moderna also joined Pfizer in seeking emergency use authorization from the FDA for booster jabs of its Covid vaccines for all adults. Looking at yesterday’s other data, US housing starts fell in October to an annualised rate of 1.520m (vs. 1.579m expected), whilst the previous months’ reading was also revised lower. Building permits rose by more than expected however, up to an annualised rate of 1.650m (vs. 1.630m expected). Finally, Canada’s CPI inflation reading rose to +4.7% in October as expected, marking the largest annual rise since February 2003. To the day ahead now, and data releases from the US include the weekly initial jobless claims, the Philadelphia Fed’s business outlook for November, the Kansas City Fed’s manufacturing index for November, and the Conference Board’s leading index for October. Central bank speakers include PBoC Governor Yi Gang, the ECB’s Centeno, Panetta and Lane, and the Fed’s Bostic, Williams, Evans and Daly. There’ll also be a number of decisions from EM central banks, including Bank Indonesia, the Central Bank of Turkey and the South African Reserve Bank. Finally, earnings releases include Intuit, Applied Materials and TJX. Tyler Durden Thu, 11/18/2021 - 08:05.....»»

Category: blogSource: zerohedgeNov 18th, 2021

"The Big Short" investor Michael Burry has bet against Tesla stock, warned it"s a bubble about to burst, and called out Elon Musk for selling shares

Burry has ridiculed Tesla's valuation and accused Musk of selling stock because he knows it's overpriced. Musk dismissed him as a "broken clock." Michael Burry and Elon Musk.Jim Spellman; Pool / Getty Images Michael Burry has ridiculed Tesla's valuation, and suggested Elon Musk knows the stock is overpriced. "The Big Short" investor's fiery comments led Musk to call him a "broken clock" this week. Here are Burry's best tweets about Musk, Tesla, and the electric-vehicle boom. Michael Burry has publicly bet against Tesla, warned the automaker's stock is a bubble about to burst, and accused CEO Elon Musk of selling his company's shares not to pay taxes or appease regulators, but because Musk knows they're overvalued.The investor of "The Big Short" fame clearly irritated Musk, as the Tesla chief dismissed him as a "broken clock" this week. Burry promptly deleted his remaining tweets, and took down his Twitter account.Here are Burry's 12 best tweets about Tesla, Musk, and the electric-vehicle boom:1. "What do $TSLA, $BTC, option gamma traders have in common? Rhymes with Rubble." — November, 20202. "So, @elonmusk, yes, I'm short $TSLA, but some free advice for a good guy ... Seriously, issue 25-50% of your shares at the current ridiculous price. That's not dilution. You'd be cementing permanence and untold optionality. If there are buyers, sell that #TeslaSouffle." — December, 20203. "Well, my last Big Short got bigger and Bigger and BIGGER too ... $TSLA $60 billion increase in market cap today alone ... 1 GM, 2 Hersheys, 3 Etsys, 4 Dominos, 10 Vornados ... enjoy it while it lasts." — January, 20214. "$TSLA below $100/share by later this year will not crash the system. There is no reflexivity in such a fall. But it would trigger the end of an era for a certain type of investing." — February, 20215. "$TSLA and $BTC correlation coefficient is 0.951967 over the last six months. @elonmusk going for perfect unity? Nah, Elon dreams the impossible. He is determined to break unity. Correlation > 1. And he has history on his side. $TSLA and $BTC investors can make anything happen." — February, 20216. "Chinese regulators summon Tesla on quality issues as consumers complain about quality ... but $TSLA bought $BTC. In my mind's eye, so much #digitalconfetti." — February, 20217. "In the SF Bay Area, $TSLA vehicles are everywhere. May need two hands to count them at a stop light. Everyone I know owns 1+, though some have gone back to ICE. I've talked with industry players, down to the mechanics. Remarkably similar to 1999 and 2006." — February 20218. "Fads today (#BTC, #EV, SAAS #memestocks) are like housing in 2007 and fiber/.com/comm/routers in 1999. On the whole, not wrong, just driven by speculative fervor to insane heights from which the fall will be dramatic and painful." — March, 20219. "Regarding what @elonmusk NEEDS to sell because of the proposed unrealized gains tax, or to #solveworldhunger, or ... well, there is the matter of the tax-free cash he took out in the form of personal loans backed by 88.3 million of his shares at June 30th." — November, 202110. "Can $TSLA fall 80, 90%? After 2000, many high flyers did. $AMZN fell 95% 2 decades ago, changed its whole biz, and thrived much later. May 1, 2020 - $TSLA at $163/share is 'too high' and he was not kidding, said @elonmusk." —  November, 202111. "No, @elonmusk, the true test is achieving that without massive government and electricity subsidies on the backs of taxpayers who don't own your cars." — November, 202112. "Let's face it. @elonmusk borrowed against 88.3 million shares, sold all his mansions, moved to Texas, and is asking @BernieSanders whether he should sell more stock. He doesn't need cash. He just wants to sell $TSLA." — November, 2021Read more: The creator of a Michael Burry subreddit explains why 'The Big Short' investor's selling spree is a huge red flag — and lays out why it's a major endorsement for the few stocks he has leftRead the original article on Business Insider.....»»

Category: personnelSource: nytNov 18th, 2021

Futures Flat Amid Fresh Inflation Jitters; Yen Tumbles To 5 Year Low

Futures Flat Amid Fresh Inflation Jitters; Yen Tumbles To 5 Year Low Price action has been generally uninspiring, with US index futures and European stocks flat after UK inflation climbed faster than expected to the highest in a decade, heaping pressure on the Bank of England to raise interest rates, while Asian markets fell as investors fretted over early rate hikes by the Federal Reserve after strong retail earnings dented the stagflation narrative.  Ten-year Treasury yields held around 1.63% and the dollar was steady. Cryptocurrencies suffered a broad selloff, while oil extended losses amid talk of a coordinated U.S.-China release of reserves to tame prices. Gold rose. At 7:30 a.m. ET, Dow e-minis were down 14 points, or 0.04%. S&P 500 e-minis were up 1.25 points, or 0.0.3% and Nasdaq 100 e-minis were up 24.75 points, or 0.15%, boosted by gains in Tesla and other electric car-makers amid growing demand for EV makers. Target Corp was the latest big-name retailer to report positive results, as it raised its annual forecasts and beat profit expectations, citing an early start in holiday shopping. But similar to Walmart, shares of the retailer fell 3.1% in premarket trade as its third-quarter margins were hit by supply-chain issues. Lowe's rose 2.2% after the home improvement chain raised its full-year sales forecast on higher demand from builders and contractors, as well as a strong U.S. housing market. Wall Street indexes had ended higher on Tuesday after data showed retail sales jumped in October, and Walmart and Home Depot both flagged strength in consumer demand going into the holiday season. While the readings showed that a rise in inflation has not stifled economic growth so far, any further gains in prices could potentially dampen an economic recovery. Indeed, even as global stocks trade near all-time highs, worries are rising that growth could be derailed by inflation, the resurgent virus, or both. The question remains whether the jump in costs will prove transitory or become a bigger challenge that forces a sharper monetary policy response, roiling both shares and bonds. The market now sees a 19% probability of a rate hike by the Fed in their March 2022 meet, up from 11.8% probability last month. “The markets are still driven by uncertainty regarding how transitory inflation is,” according to Sebastien Galy, senior macro strategist at Nordea Investment Funds. “The market is assessing the situation about inflation -- what is in the price and what is not.” On the earnings front, Baidu reported a 13% jump in sales after growth in newer businesses such as the cloud helped offset a slowdown in its main internet advertising division. Nvidia and Cisco Systems are scheduled to report results later today In premarket trading, Tesla inexplicably rose as much as 2.4% in U.S. pre-market trading, extending a bounce from the previous session after CEO Elon Musk disclosed even more stock sales. Peers Rivian and Lucid added 0.9% and 8.8%, respectively. Here are some of the biggest U.S. movers today: Electric-vehicle makers Rivian Automotive (RIVN US), Lucid (LCID US) and Canoo (GOEV US) all move higher in U.S. premarket trading on heavy volumes, extending their gains and after Rivian and Lucid notched up milestones in their market values on Tuesday. The gains for Rivian on Tuesday saw its market capitalization surpass Germany’s Volkswagen, while Lucid’s market value leapfrogged General Motors and Ford. Tesla (TSLA US) shares rise 1.3% in U.S. premarket trading, extending the bounce the EV maker saw in the prior session and after CEO Elon Musk disclosed more share sales. Visa (V US) shares slip in U.S. premarket trading after Amazon.com said it will stop accepting payments using Visa credit cards issued in the U.K. starting next year. Boeing (BA US) gains 1.9% in premarket trading after Wells Fargo upgrades the airplane maker to overweight from equal weight in a note, saying the risk-reward is now skewed positive. Citi initiates a pair trade of overweight Plug Power (PLUG US) and underweight Ballard Power Systems (BLDP US), downgrading the latter to neutral on weak sales in China and likely delay in meaningful fuel cell adoption. Ballard Power falls 3.4% in premarket trading. La-Z-Boy (LZB US) climbed 7% in postmarket trading after it reported adjusted earnings per share for the fiscal second quarter of 2022 that beat the average analyst estimate and boosted its quarterly dividend. StoneCo’s (STNE US) shares fall as much as 9% in postmarket trading Tuesday after the fintech reported a weaker-than-expected adjusted results for the third quarter. Chembio Diagnostics (CEMI US) rose 11% in extended trading after saying it submitted an Emergency Use Authorization application to the U.S FDA for its new DPP SARS-CoV-2 Antigen test. European stocks treaded water with U.S. equity futures as the worst outbreak of Covid infections since the start of the pandemic held the rally in check. In the U.K., inflation climbed faster than expected to the highest in a decade, heaping pressure on the Bank of England to raise interest rates, pressing on the FTSE 100 to lag peer markets. Asian stocks fell, halting a four-day rally, as investors factored in higher Treasury yields and the outlook for U.S. monetary policy to assess whether the region’s recent gains were excessive.   The MSCI Asia Pacific Index slid as much as 0.7%, pulling back from a two-month high reached Tuesday. The banking sector contributed the most to Wednesday’s drop as the Commonwealth Bank of Australia reported cash earnings that were below some estimates. South Korea led the region’s decline, with the Kospi falling more than 1%, weighed down by bio-pharmaceutical firms. Asia’s stocks are taking a breather from a run-up driven by expectations for earnings to improve and economies to recover from quarters of pandemic-induced weakness. The benchmark is coming off a two-week gain of 1.5%.  “Shares are correcting recent gains, although I’d say it’s not much of a correction as the drop is mild,” said Tomo Kinoshita, a global market strategist at Invesco Asset Management in Tokyo. “The relatively solid economic performances in the U.S. and Europe signal positive trends for Asian exporters,” which will support equities over the long term, he said.  U.S. stocks climbed after data showed the biggest increase in U.S. retail sales since March, while results from Walmart Inc. and Home Depot Inc. showed robust demand. The 10-year Treasury yield hit 1.64%, gaining for a fourth day. Japanese equities fell, cooling off after a four-day advance despite the yen’s drop to the lowest level against the dollar since 2017. Service providers and retailers were the biggest drags on the Topix, which dropped 0.6%. Recruit and Fast Retailing were the largest contributors to a 0.4% loss in the Nikkei 225. The yen slightly extended its decline after tumbling 0.6% against the greenback on Tuesday. The value of Japan’s exports gained 9.4% in October, the slowest pace in eight months, adding to signs that global supply constraints are still weighing on the economy. Indian stocks fell, led by banking and energy companies, as worries over economic recovery and inflation hurt investors’ sentiment. The S&P BSE Sensex fell 0.5% to 60,008.33 in Mumbai, while the NSE Nifty 50 Index declined by 0.6%. The benchmark index has now dropped for five of seven sessions and is off 3.7% its record level reached on Oct. 18. All but five of the 19 sector sub-indexes compiled by BSE Ltd. declined, led by a gauge of real estate companies.  Fitch Ratings kept a negative outlook on India’s sovereign rating, already at the lowest investment grade, citing concerns over public debt that’s the highest among similar rated emerging-market sovereigns.  While high-frequency data suggests India’s economic recovery is taking hold, central bank Governor Shaktikanta Das said at an event on Tuesday that the recovery is uneven. “Feeble global cues are weighing on sentiment,” Ajit Mishra, a strategist with Religare Broking, said in a note. He expects indexes to slide further but the pace of decline to be gradual with Nifty having support at 17,700-17,800 level. Shares of Paytm are scheduled to start trading on Thursday after the digital payment company raised $2.5b in India’s biggest initial share sale. Local markets will be closed on Friday for a holiday.  Reliance Industries contributed the most to Sensex’s decline, decreasing 2.1%. The index heavyweight has lost 5% this week, headed for the biggest weekly drop since June 27. In rates, Treasuries were steady with yields slightly richer across the curve and gilts mildly outperforming after paring early losses. Treasury yields except 20-year are richer by less than 1bp across curve with 30-year sector outperforming slightly; 10-year yields around 1.63% after rising as high as 1.647% in early Asia session. Focal points for U.S. session include 20-year bond auction -- against backdrop of Fed decision to not taper in the sector, made after last week’s poorly bid 30-year bond sale, and seven Fed speakers scheduled. The $23BN 20-year new issue at 1pm ET is first at that size after cuts announced this month; WI yield at 2.06% is 4bp richer than last month’s, which tailed the WI by 2.5bp. In Europe, gilts richen slightly across the short end, short-sterling futures fade an open drop after a hot inflation print. Peripheral spreads are marginally wider to core. In FX, the Bloomberg Dollar Spot Index drifted after earlier rising to its highest level in over a year, spurred by strong U.S. retail sales and factory output data Tuesday; the greenback traded mixed versus its Group-of-10 peers though most currencies were consolidating recent losses against the greenback. The pound reached its strongest level against the euro in nearly nine months after U.K. inflation climbed faster than expected to the highest in a decade, heaping pressure on the Bank of England to raise interest rates. The Australian dollar hit a six-week low as third quarter wage data missed the central bank’s target, prompting offshore funds to sell the currency; the three-year yield fell back under 1%. The yen declined to its lowest level in more than four years as growing wagers of quicker policy normalization in the U.S. contrasted with the outlook in Japan, where interest rates are expected to be kept low. Super-long bonds fell. Volatility broke through the recent calm in currency markets, where the cost of hedging against volatility in the euro against the dollar over the next month climbed the most since the pandemic struck in March 2020. The move comes as traders bake in bets on faster rate hikes to curb inflation. The Turkish lira extended the week’s downward move, weakening another 2% against the dollar after comments from Erdogan sent the USDTRY hitting record highs of 10.5619 The Chinese yuan advanced to its highest level since 2015 against a basket of trading partners’ currencies following the dollar’s surge. Bloomberg’s replica of the CFETS basket index rises 0.3% to 101.9571, closer to the level that triggered a shock devaluation by the PBOC in 2015, testing the central bank’s tolerance before stepping in with intervention. In commodities, crude futures dropped as the market weighs the potential for a join U.S.-China stockpile-reserve release. WTI is down more than 1%, back on a $79-handle; Brent slips back toward $81.50, trading near the middle of this week’s range. Most base metals are under pressure with LME copper down as much as 1.4%. Spot gold adds $10 near $1,860/oz. European gas surged to the highest level in a month as delays to a controversial new pipeline from Russia stoked fears of a supply shortage with winter setting in. Cryptocurrencies remained lower after a tumble, with Bitcoin steadying around the $60,000 level. Looking at the day ahead now, and data releases include October data on UK and Canadian CPI, as well as US housing starts and building permits. Central bank speakers include ECB President Lagarde and the ECB’s Schnabel, the Fed’s Williams, Bowman, Mester, Waller, Daly, Evans and Bostic, and the BoE’s Mann. Finally, the ECB will be publishing their Financial Stability Review, and earnings releases today include Nvidia, Cisco, Lowe’s and Target. Market Snapshot S&P 500 futures little changed at 4,696.00 STOXX Europe 600 up 0.1% to 489.79 MXAP down 0.5% to 200.06 MXAPJ down 0.4% to 656.01 Nikkei down 0.4% to 29,688.33 Topix down 0.6% to 2,038.34 Hang Seng Index down 0.2% to 25,650.08 Shanghai Composite up 0.4% to 3,537.37 Sensex down 0.4% to 60,064.33 Australia S&P/ASX 200 down 0.7% to 7,369.93 Kospi down 1.2% to 2,962.42 Brent Futures down 0.8% to $81.79/bbl Gold spot up 0.5% to $1,859.93 U.S. Dollar Index little changed at 95.95 German 10Y yield little changed at -0.25% Euro little changed at $1.1310 Top Overnight News from Bloomberg Bond traders are bracing for a key test Wednesday as the Treasury looks to sell its first long-dated debt since inflation worries spooked buyers at last week’s poorly received 30-year auction Increasingly stretched prices in property and financial markets, risk-taking by non-banks and elevated borrowing pose a threat to euro-area stability, the European Central Bank warned Germany is giving investors a rare chance to grab some of Europe’s safest and positive-yielding debt. The country will sell one billion euros ($1.13 billion) of its longest-dated debt at 10:30 a.m. London on Wednesday. The country’s 30-year notes are currently trading with a yield 0.09%. It’s a paltry rate, but probably the last time for a while that Germany will offer the maturity ECB Governing Council member Olli Rehn says euro- area inflation is accelerating due to increasing demand pushing up the price of energy and supply bottlenecks, according to interview in Finland’s Talouselama magazine The yuan’s advance to a six-year high versus China’s trading partners this week has investors asking how far the central bank will let the rally run. The yuan extended gains on Wednesday against a basket of 24 currencies of the nation’s trading partners, bringing it close to the level that triggered a shock devaluation by the People’s Bank of China in 2015 Turkish President Recep Tayyip Erdogan vowed to continue fighting for lower interest rates, sending a clear signal to investors a day before the central bank sets its policy. The lira weakened A more detailed look at global markets courtesy of Newsquawk Asian equity markets traded mixed and struggled to sustain the positive lead from the US where better than expected Industrial Production and Retail Sales data spurred the major indices, in which the S&P 500 reclaimed the 4,700 level and briefly approached to within four points of its all-time high. ASX 200 (-0.7%) was led lower by underperformance in the top-weighted financials sector amid weakness in the largest lender CBA despite a 20% jump in quarterly cash profit, as operating income was steady and it noted that loan margins were significantly lower. Mining related stocks also lagged in Australia due to the recent declines in global commodity prices amid the stronger USD and higher US yields. Nikkei 225 (-0.4%) retraced its opening gains after disappointing Machinery Orders and miss on Exports which grew at the slowest pace in eight months, while the KOSPI (-1.2%) suffered due to virus concerns with daily infections at the second highest on record for South Korea. Hang Seng (-0.3%) and Shanghai Comp. (+0.4%) were varied with Hong Kong dragged lower by tech stocks including NetEase post-earnings, while the mainland was choppy as markets continued to digest the recent Biden-Xi meeting that was described by President Biden as a 'good meeting' and in which they discussed the need for nuclear “strategic stability” talks. US and China also agreed to provide access to each other’s journalists, although there were also comments from Commerce Secretary Raimondo that China is not living up to phase 1 trade commitments and it was reported that China is to speed up plans to replace US and foreign tech. Finally, 10yr JGBs were flat with demand hampered following the declines in T-notes, although downside was stemmed amid the flimsy sentiment across Asia-Pac trade and with the BoJ also in the market for JPY 925bln of JGBs mostly concentrated in 1-3yr and 5-10yr maturities. Top Asian News Asia Stocks Set to Snap Four-Day Advance as Kospi Leads Decline Gold Rises as Fed Officials Feed Debate on Inflation Response Deadly Toxic Air Chokes Delhi as India Clings to Coal Power PBOC May Start Raising Rates by 10bps Every Quarter in 2022: TD European equities (Stoxx 600 +0.1%) trade with little in the way of firm direction as the Stoxx 600 lingers around its ATH printed during yesterday’s session. The handover from the APAC session was mostly a softer one after the region failed to sustain the positive lead from the US which saw the S&P 500 approach within four points of its all-time high. Stateside, US futures are just as uninspiring as their European counterparts (ES flat) ahead of another busy day of Fed speak and pre-market earnings from retail names Target (TGT) and TJX Companies (TJK) with Cisco (CSCO) and NVIDIA (NVDA) due to report after-hours. Markets still await a decision on the next Fed Chair which President Biden said will come in around four days yesterday; as it stands, PredictIt assigns a circa 65% chance of Powell winning the renomination. Sectors in Europe have a marginal positive tilt with Media names outperforming peers alongside gains in Vivendi (+1.0%) after Italian prosecutors asked a judge to drop a case against Vivendi's owner and CEO for alleged market manipulation. Travel & Leisure names are the notable underperformer amid losses in sector heavyweight Evolution Gaming (-9.6%) who account for 14% of the sector with the Co. accused of taking illegal wagers. In terms of individual movers, Siemens Healthineers (+4.6%) is one of the best performers in the region after the Co. noted that revenues are on track to grow 6-8% between 2023 and 2025. UK Banking names such as Lloyds (+1.3%) and Natwest (+1.1%) have benefitted from the favourable rate environment in the UK with today’s inflation data further cementing expectations for a move in rates by the BoE next month. Conversely, this acted as a drag on the UK homebuilder sector at the open before moves were eventually scaled back. SSE (-4.5%) underperforms after announcing a GBP 12.5bln investment to accelerate its net zero ambitions. Top European News Epstein’s Paris Apartment Listed for $14 Million, Telegraph Says Volkswagen Shares Stall as Analysts Doubt Its EV Street Cred Germany to Move Ahead With Tighter Covid Curbs Amid Record Cases U.K. Urges EU Not to Start Trade War If Brexit Deal Suspended In FX, the Greenback extended Tuesday’s post-US retail sales and ip gains to set new 2021/multi-year highs overnight when the index hit 96.266 and several Dollar pairs probed or crossed psychological round numbers. However, the latest bull run has abated somewhat amidst some recovery gains in certain rival currencies and a general bout of consolidation ahead of housing data, another raft of Fed speakers and Usd 23 bn 20 year supply that will be of note after a bad debut for new long londs last week, not to mention tepid receptions for 3 and 10 year offerings prior to that. NZD/AUD - A marked change in the tide down under as the Aud/Nzd cross reverses sharply from around 1.0450 to sub-1.0400 and gives the Kiwi enough impetus to regain 0.7000+ status vs its US peer with extra incentive provided by NZ PM Ardern announcing that the entire country is expected to end lockdown and move to a new traffic light system after November 29, while Auckland’s domestic borders will reopen from December 15 for the fully vaccinated and those with negative COVID-19 tests. Conversely, the Aussie is struggling to stay within sight of 0.7300 against its US counterpart in wake of broadly in line Q3 wage prices that leaves the y/y rate still some way short of the 3% pace deemed necessary to lift overall inflation by the RBA. GBP/CAD - Sterling is striving to buck the overall trend with help from more forecast-topping UK data that should give the BoE a green light for lifting the Bank Rate in December, as headline CPI came in at 4.2% y/y, core at 3.4% and PPI prints indicate more price pressure building in the pipeline. Cable printed a minor new w-t-d peak circa 1.3474 in response before waning and Eur/Gbp fell below the prior y-t-d low and 0.8400, but is now back above awaiting more news on the Brexit front and a speech from one of the less hawkish MPC members, Mann. Elsewhere, the Loonie is hovering around 1.2550 vs the Greenback and looking toward Canadian inflation for some fundamental direction as oil prices continue to fluctuate near recent lows, but Usd/Cad may also be attracted to decent option expiry interest between 1.2540-55 in 1.12 bn. CHF/EUR/JPY - All straddling or adjacent to round numbers against the Dollar, but the Franc lagging below 0.9300 on yield differentials, while the Euro has recovered from a fresh 2021 trough under 1.1300 and Fib support at 1.1290 to fill a gap if nothing else, and the Yen just defended 115.00 irrespective of disappointing Japanese machinery orders and internals within the latest trade balance. In commodities, WTI and Brent benchmarks are pressured this morning but the magnitude of the action, circa USD 0.70/bbl at the time of writing, is less pronounced when compared to the range of the week thus far and particularly against last week’s moves. Newsflow has been slim and the downside action has arisen without fresh catalysts or drivers; note, participants are cognisant of influence perhaps being exerted by today’s WTI Dec’21 option expiry. To briefly surmise the morning’s action, Vitol executives provided bullish commentary citing limited capacity to deal with shocks and on that theme, there were reports of an explosion at an oil pipeline in Southern Iran, said to be due to aging equipment. This, alongside reports that Belarus is restricting oil flows to Poland for three-days for maintenance purposes, have not steadied the benchmarks. Elsewhere, last night’s private inventories were mixed but bullish overall, with the headline a smaller than expected build and gasoline a larger than expected draw. On gasoline, some desks posit that this draw may serve to increase pressure for a US SPR release, and as such look to today’s EIA release which is expected to print a gasoline draw of 0.575M. Moving to metals, spot gold and silver are firmer this morning but, in a similar vein to crude, remain well within familiar ranges as specific catalysts have been light and initial USD action has largely fizzled out to the index pivoting the U/C mark. More broadly, base metals are pressured as inventories of iron ore are at their highest for almost three years in China as demand drops, with this having a knock-on impact on coking coal, for instance. US Event Calendar 7am: Nov. MBA Mortgage Applications, prior 5.5% 8:30am: Oct. Building Permits, est. 1.63m, prior 1.59m, revised 1.59m 8:30am: Oct. Building Permits MoM, est. 2.8%, prior -7.7%, revised -7.8% 8:30am: Oct. Housing Starts MoM, est. 1.5%, prior -1.6%; Housing Starts, est. 1.58m, prior 1.56m DB's Henry Allen concludes the overnight wrap Even as inflation jitters remained on investors’ radars, that didn’t prevent risk assets pushing onto fresh highs yesterday, as investor sentiment was bolstered by strong economic data and decent corporate earnings releases. In fact by the close of trade, the S&P 500 (+0.39%) had closed just -0.02% beneath its all-time closing record, in a move that also brought the index’s YTD gains back above +25%, whilst Europe’s STOXX 600 (+0.17%) hit an all-time high as it posted its 16th gain in the last 18 sessions. Starting with the data, we had a number of positive US releases for October out yesterday, which echoed the strength we’d seen in some of the other prints, including the ISMs and nonfarm payrolls that had both surprised to the upside in the last couple of weeks. Headline retail sales posted their biggest gain since March, with a +1.7% advance (vs. +1.4% expected), whilst the measure excluding autos and gas stations was also up by a stronger-than-expected +1.4% (vs. +0.7% expected). Then we had the industrial production numbers, which showed a +1.6% gain in October (vs. +0.9% expected), though it’s worth noting around half of that increase was a recovery from Hurricane Ida’s effects. And that came against the backdrop of solid earnings results from Walmart and Home Depot as well earlier in the session. They saw Walmart raise their full-year guidance for adjusted EPS to around $6.40, up from $6.20-$6.35 previously, whilst Home Depot reported comparable sales that were up +6.1%. To be honest it was difficult to find much in the way of weak data, with the NAHB’s housing market index for November up to a 6-month high of 83 (vs. 80 expected). Amidst the optimism however, concerns about near-term (and longer-term) inflation pressures haven’t gone away just yet, and the 5yr US breakeven rose again, increasing +1.1bps yesterday to an all-time high of 3.21%. Bear in mind that just 12 days ago (before the upside CPI release) that measure stood at 2.89%, so we’ve seen a pretty sizeable shift in investor expectations in a very short space of time as they’ve reacted to the prospect inflation won’t be as transitory as previously believed. The increase was matched by a +1.3bps increase in nominal 5yr yields to a post-pandemic high of 1.27%. The 10yr yield also saw a slight gain of +1.9bps to close at 1.63%, and this morning is up a further +0.7bps. Against this backdrop, the dollar index (+0.58%) strengthened further to its highest level in over a year yesterday, though the reverse picture has seen the euro weaken beneath $1.13 this morning for the first time since July 2020. Speaking of inflation, there were fresh pressures on European natural gas prices yesterday, which surged by +17.81% to €94.19 per megawatt-hour. That’s their biggest move higher in over a month, and follows the decision from the German energy regulator to temporarily suspend the certification of the Nord Stream 2 pipeline, adding further short-term uncertainty to the winter outlook. UK natural gas futures (+17.15%) witnessed a similar surge, and their US counterparts were also up +3.19%. Elsewhere in the energy complex, Brent crude (+0.46%) oil prices moved higher as well. Overnight in Asia, equity indices are trading lower this morning including the CSI (-0.05%), the Nikkei (-0.45%) and the Hang Seng (-0.55%), though the Shanghai Composite (+0.19%) has posted a modest advance. There were also some constructive discussions in the aftermath of the Biden-Xi summit the previous day, with US national security adviser Jake Sullivan saying that the two had spoken about the need for nuclear “strategic stability” talks, which could offer the prospect of a further easing in tensions if they do come about. Looking forward, futures are indicating a muted start in US & Europe later on, with those on the S&P 500 (-0.03%) and the DAX (-0.15%) pointing to modest declines. Elsewhere, markets are still awaiting some concrete news on who might be nominated as the next Fed Chair, though President Biden did say to reporters that an announcement would be coming “in about four days”, so investors will be paying close attention to any announcements. Senator Sherrod Brown, who chairs the Senate Banking Committee, who earlier in the week noted a pick was imminent, followed up by proclaiming he was “certain” that the Senate would confirm either of Chair Powell or Governor Brainard. Staying on the US, as Congress waits for the Congressional Budget Office’s score on Biden’s social and climate spending bill, moderate Democratic Senator Manchin noted continued uncertainty about the bill’s anti-inflationary bona fides. Elsewhere, the impending debt ceiling has worked its way back into the spotlight, with Treasury Secretary Yellen saying that she’ll soon provide updates on how much cash the Treasury will have to pay the government’s bills. The market has started to price in at least some risk, with yields on Treasury bills maturing in mid-to-late December higher than neighbouring maturities, and the Washington Post’s Tony Romm tweeted yesterday that the new deadline that the Treasury was expected to share soon was on December 15. Turning to Germany, coalition negotiations are continuing between the centre-left SPD, the Greens and the liberal FDP, and yesterday saw SPD general secretary Lars Klingbeil state that “The goal is very clear, to have a completed coalition agreement in the next week”. We’ve heard similar comments from the Greens’ general secretary, Michael Kellner, who also said that “We aim to achieve a coalition agreement next week". One issue they’ll have to grapple with is the resurgence in Covid-19 cases there, and Chancellor Merkel and Vice Chancellor Scholz (who would become chancellor if agreement on a traffic-light coalition is reached) are set to have a video conference with regional leaders tomorrow on the issue. Staying on the pandemic, it’s been reported by the Washington Post that the Biden administration will announce this week that it plans to purchase 10 million doses of Pfizer’s Covid pill. The company will submit data for the pill to regulators before Thanksgiving. It’s not just the US that will benefit from Pfizer’s pill however, as the pharmaceutical company will also license generic, inexpensive versions of the pill to low- and middle-income countries, which should be a global boost in the fight against the virus. Looking at yesterday’s other data, the main release came from the UK employment numbers, which showed that the number of payrolled employees rose by +160k in October, whilst the unemployment rate in the three months to September fell to 4.3% (vs. 4.4% expected). That release was better than the Bank of England’s MPC had expected in their November projections, and sterling was the top-performing G10 currency yesterday (+0.06% vs. USD) as the statistics were seen strengthening the case for a December rate hike. In response to that, gilts underperformed their European counterparts, with 10yr yields up +2.7bps. That contrasted with yields on 10yr bunds (-1.4bps), OATs (-1.8bps) and BTPs (-2.6bps), which all moved lower on the day. Interestingly, that divergence between bunds and treasury yields widened further yesterday, moving up to 188bps, the widest since late-April. To the day ahead now, and data releases include October data on UK and Canadian CPI, as well as US housing starts and building permits. Central bank speakers include ECB President Lagarde and the ECB’s Schnabel, the Fed’s Williams, Bowman, Mester, Waller, Daly, Evans and Bostic, and the BoE’s Mann. Finally, the ECB will be publishing their Financial Stability Review, and earnings releases today include Nvidia, Cisco, Lowe’s and Target. Tyler Durden Wed, 11/17/2021 - 07:50.....»»

Category: dealsSource: nytNov 17th, 2021

AMC will accept shiba inu for online payments by next quarter, according to the chief executive

AMC will start accepting shiba inu online in the next two to four months, CEO Adam Aron said on Monday. Shiba Inu and umbrellazoljo AMC will be accepting shiba inu online in the next two to four months, CEO Adam Aron said on Monday.    Aron said online payments company Bitpay had agreed to support shiba inu for purchases of movie tickets and concessions. Aron recently ran a Twitter poll asking if the company should take the meme token as payment - 81% said "yes". Sign up here for our daily newsletter, 10 Things Before the Opening Bell. AMC Entertainment, the largest movie theater chain in the US, will start accepting crypto meme coin shiba inu for online payments in the next two to four months, according to chief executive Adam Aron. Aron tweeted the decision on Monday and said it was thanks to crypto payment provider Bitpay that the company could offer the dogecoin spin-off in addition to other digital tokens to pay for movie tickets and concessions.  Aron said AMC would be the first Bitpay client to accept shiba inu. "Attention #SHIBArmy: Our friends @Bitpay decided to support Shiba Inu specifically because I asked, so AMC can take shiba inu for online payments of movie tickets and concessions. @AMCTheatres to be the first @bitpay client to accept Shiba Inu. Timing 60-120 days. This is a WOW!" Aron said. Adam Aron tweetAdam Aron TwitterAMC had already announced earlier this month in an earnings call that it was exploring how it could accept shiba inu. Aron said the company had found a solution that meant it did not have to hold crypto on its balance sheet, with all the associated risks."A lot of you voted, and a lot of you voted yes, and we are now figuring out how we can take shiba inu as a currency," Aron said in an earnings call last Monday."That's the next one on our cryptocurrency hit parade."Aron had launched a Twitter poll late October asking if the company should accept shiba inu payments and 81.4% had said "for sure".Thanks to the "SHIBarmy"  - fervent fans of shiba inu -  pushing for Robinhood to list it and huge purchases by crypto whale, the coin has doubled in value in the space of a month, according to Coinbase data. Shiba inu was last down 9% on Tuesday, as the broader cryptocurrency market got knocked lower by a combination of bearish factors. Aron has embraced AMC's fame as a meme stock and appealed to the retail traders that propelled it higher during the pandemic.Aron also tweeted on Friday that AMC now accepted bitcoin, ether, bitcoin cash and litecoin for online payments for its website and smartphone app. It had already accepted crypot for gift card payments.  The company also announced in the earnings call that it would also accept dogecoin for online payments by the first quarter of 2022. Read the original article on Business Insider.....»»

Category: topSource: businessinsiderNov 16th, 2021

Stocks & Bonds Dump, Dollar Pumps As Breakevens Soar

Stocks & Bonds Dump, Dollar Pumps As Breakevens Soar The most notable aspect of today's trading was the ongoing hawkish tilt being priced-in by STIRs, now expecting at least one rate-hike by July 2022... Source: Bloomberg TSLA was down over 20% from its highs today (back below $1000) before the sudden mysterious buying ramp occurred (exactly like we saw last week when Musk was dumping shares)... After a solid overnight session - despite weakening China data - US equities saw wave of selling at the cash open that accelerated into the European close. Small Caps were the biggest loser on the day. A late-day panic bid lifted the S&P green on the day, but left th erest of the majors marginally red still... As Value Line's Geometric Index shows, the median stock was lower on the day... And it felt like, as Tesla, so the rest of the bubble markets went today... Treasury yields were higher across the board today with the curve notably steeper (30Y +7bps, 2Y +1bps). The selling wave hit around 0830ET and continued until the EU close for the long-end... Source: Bloomberg The 30Y Yield broke back above 2.00% (but remains below the Fed Taper Day highs)... Source: Bloomberg US Breakevens surged higher again today, to fresh record highs... Source: Bloomberg Additionally, the US inflation expectations are accelerating faster than other Developed Economies... Source: Bloomberg Interestingly, IG credit saw a huge outflow last week from one of its largest ETFs... Source: Bloomberg Investors withdrew a net $1.49 billion from the IShares iBoxx $ Investment Grade Corporate Bond ETF (ticker LQD) in a single session, the biggest one-day decrease since April 1. The outflow reduced the fund’s assets by 3.9 percent to $36.8 billion, the lowest level in at least a year, according to data compiled by Bloomberg. Crypto pumped'n'dumped today. Bitcoin ramped up above $66,000 overnight before slumping back and finding support at $64,000... Source: Bloomberg Ethereum jumped up above $4750 before fading back below $4600... Source: Bloomberg Gold managed gains on the day, despite the dollar's strength, rebounding from an earlier selling wave... Thanks to supportive weakness in real yields... Source: Bloomberg Oil prices staged a decent comeback today after WTI fell back below $80 once again... US NatGas prices tested down into the red briefly before taking off and getting back above $5.00... Finally, if this morning’s move in the S&P 500 Index holds into the close, the equity index will rack up its 22nd day with a move of less than 1% in either direction, a streak not seen in more than 22 months. The tranquility of the S&P 500 is in contrast to small caps or the Nasdaq 100 Index, which have posted at least six days with bigger moves during that time. The equity market looks calm as the S&P 500 Index enters the third week of the month -- when most equity options expire. That event has repeatedly shaken up stocks this year. While history is not always a trustworthy guide, the S&P 500 has posted a 1% move (in either direction) in six of the past eight op-ex weeks, data compiled by Bloomberg show. But, for now, as SpotGamma notes, the options market (risk-reversals) are highly complacent: This shows the price of a slightly out-of-the-money call against an equivalent put and its recent rise suggests traders have little concern with current markets. This metric is not just a barometer of traders risk view, but does suggest that the vanna tailwind (i.e. selling implied volatility to buy S&P500) has lost its force indicating perhaps less impulsive gains from here in the short-term. Tyler Durden Mon, 11/15/2021 - 16:02.....»»

Category: blogSource: zerohedgeNov 15th, 2021

Jim Simons" RenTech fund quadrupled its Tesla stake last quarter - and boosted its AMC bet by 38%

The mathematician's hedge fund reversed course on Tesla after slashing its stake in Elon Musk's company by 75% in the second quarter. Jim Simons. Sylvain Gaboury/Getty Images Jim Simons' RenTech quadrupled its Tesla stake and grew its AMC position by 38% last quarter. The quantitative hedge fund's AMC position still fell in value as the stock price slumped. Simons' fund reversed course on Tesla after slashing its wager by 75% in the second quarter. Renaissance Technologies quadrupled its Tesla stake and boosted its AMC Entertainment bet by nearly 40% in the third quarter, Securities and Exchange Commission filings show.RenTech, one of the biggest and best-performing hedge funds in history, increased its Tesla holdings from about 204,000 shares to 814,000 shares. The electric-vehicle company's stock price jumped 14% last quarter, meaning the value of RenTech's position surged by about 360% to $631 million. As a result, Tesla was the fund's 13th most-valuable holding as of September 30, up from 106th on the list at the end of June.The quantitative hedge fund, which was founded by former NSA codebreaker and MIT math professor Jim Simons, also bolstered its AMC position from 1.8 million shares to 2.5 million shares. However, the movie-theater chain - a firm favorite of meme-stock traders - suffered a 33% drop in its stock price last quarter. The value of RenTech's stake shrank by 7% to $95 million as a result.Notably, RenTech slashed its Tesla position by 75% in the three months to June 30, suggesting it warmed up to Elon Musk's automaker last quarter. Meanwhile, the fund had already tripled its AMC holdings in the second quarter, indicating it grew even more bullish on the stock last quarter.RenTech has held larger positions in both companies in the past. For example, it owned a split-adjusted 20 million Tesla shares at the end of 2019, which would be worth more than $20 billion today. It also held nearly 3.5 million AMC shares at the half-year mark in 2019, which would have fetched about $250 million when AMC's stock price peaked in May of this year.The hedge fund, which employs algorithms to determine most of its trades, counted a $2.1 billion stake in Novo-Nordisk, a $1.2 billion stake in Atlassian, and a roughly $950 million position in Verisign as its top three holdings at the end of September. Read the original article on Business Insider.....»»

Category: topSource: businessinsiderNov 15th, 2021

Futures Rise As Usual, Approaching All Time High

Futures Rise As Usual, Approaching All Time High US equity futures resumed their upward climb (after Goldman quadrupled down on its call for a massive, year-end meltup driven by $15BN in inflows every single day) as major technology stocks advanced, and as investors awaited a slew of retail earnings and economic data this week to gauge the health of consumer spending while keeping an eye on runaway inflation. Better-than-estimated profit growth has led to a rally in markets, helping ease recent concerns over the hottest U.S. inflation in 30 years. At 730 a.m. ET, Dow e-minis were up 94 points, or 0.26%. S&P 500 e-minis were up 9 points, or 0.20% and about 20 points from their all time high around 4,711; while Nasdaq 100 e-minis were up 30.5 points, or 0.19%. The three major Wall Street indexes had fallen between 0.3% and 0.7% last week when the S&P 500 also snapped its longest winning streak since August 2020, amid concerns over high inflation and weakening consumer sentiment. Investors had begun pivoting into economically resilient sectors, mainly technology, towards the end of the week. Market-heavy GAMMA (fka FAAMG) stocks rose between 0.1% and 0.8% in premarket trade, with Meta Platforms Inc leading gains. On the other end, Tesla shares fell as much as 2.6% in U.S. premarket session after Elon Musk suggested over the weekend that he would sell even more stock after offloading almost $7 billion worth of shares over the past week. Tesla's declines follow a steep 15.4% drop last week after Musk offloaded a combined $6.9 billion worth of shares in the electric-car maker. Meanwhile, blank-check company Gores Guggenheim rose as much as 25% as the stock was touted among retail traders. Rivian shares were down about 2.7% in U.S. premarket trading after the electric-truck maker surged following its IPO last week. Dollar Tree Inc added 5.4% after activist investor Mantle Ridge LP revealed a 5.7% stake in the discount retailer. Strong corporate earnings are helping drive investors into stocks and overshadowing fears about the hottest U.S. inflation print in three decades. The sentiment found its way into calmer bond markets, where these fears had played out in the highest volatility since the onset of pandemic.   “Central banks may be becoming less accommodative, but they will be anxious not to derail the recovery or financial markets,” according to Cesar Perez Ruiz, chief investment officer at Pictet Wealth Management and head of asset alloaction Christophe Donay. “Q3 results have offered further proof of corporate strength.” Focus this week will be on earnings reports from several major retailers including Walmart Inc, Target Corp, Home Depot and Macy's. Their results will round off an upbeat third-quarter earnings season, which pushed Wall Street to new highs. Retail sales data for October is also due on Tuesday, and is expected to show the impact of inflation on consumer spending. Looking ahead not everyone is euphoria: in its 2022 forecast, Morgan Stanley strategists warn that inflationary headwinds may become a bigger force against U.S. stocks next year; they prefer peers in Europe and Japan. They forecast the S&P 500 will end 2022 at 4,400 -- some 6% below current levels. For bonds, they expect 10-year yields to rise to 2.10% by the end of next year on improving growth and higher real rates, up from 1.54% on Monday. “One reason we like equities in Europe and Japan is that we think inflationary challenges there are much less daunting than elsewhere,” strategists led by Andrew Sheets wrote Sunday. They also cited “more reasonable valuations, limited central bank tightening and less risk from higher taxes” vis-a-vis the U.S. In Europe, Stoxx 600 Index was little changed near a record high as rising earnings estimates supported the region’s stocks. Travel and leisure and retailers led the gains, while miners slumped. Here’s the latest on what analysts are saying about European equities: EasyJet cut to reduce from hold at Kepler Cheuvreux due to deteriorating traffic trends and a risk that it has to incentivize demand with fare discounts. Alfen Beheer loses its only buy rating as Berenberg downgrades to hold on limited near- term upside, even after last week’s sell-off in the shares. Direct Line cut to hold and Admiral raised to buy at Berenberg with the broker switching preferences in its U.K. non- life insurer coverage. B&M European is cut to underperform from sector perform at RBC with growth set to become harder to deliver for the discount retailer and better value seen elsewhere in the sector. Wood’s strategic review of its built environment business could unlock “meaningful value,” Citi writes in note upgrading the energy-services firm to buy. Earlier in the session, shares fluctuated in Hong Kong and dipped in China, where traders weighed stronger-than-expected retail sales and industrial output, central bank liquidity support and a drop in home prices. Beijing’s crackdown on real-estate leverage is among the headwinds for the world’s second-largest economy. That said, Asian equities rose for a third day as the strength in U.S. technology heavyweights Friday helped ease market worry over global inflation, reigniting appetite for growth stocks.  The MSCI Asia Pacific Index advanced as much as 0.6%, with TSMC, Tencent Holdings and Samsung Electronics among the largest contributors to the gauge’s rise. South Korea’s Kospi was the top performer among the region’s benchmarks, adding 1%.  Futures on the Nasdaq 100 climbed in Asia after the underlying measure added 1% on Friday. U.S. equities rose led by technology and communication services, with share prices remaining near all-time highs after a strong corporate earnings season.  Overall, the positive mood from last week is extending to today’s trading, said Naoki Fujiwara, chief fund manager at Shinkin Asset Management. “Chip-related stocks are doing pretty well following the earnings season, which is also backing gains for the market.” The regional benchmark capped its second straight week of gains on Friday, helped by positive earnings readings. Price data from the U.S. and China remain in focus as traders fear elevated inflation could lead to tighter monetary policy. U.S. consumer sentiment unexpectedly collapsed in early November as Americans grew increasingly concerned about inflation. Japanese stocks rose after the Nikkei newspaper reported on Friday that the government plans to compile an economic stimulus package of more than 40 trillion yen ($351 billion) in fiscal measures. “Economic stimulus had been expected to be about 30 trillion yen, but a new figure of 40 trillion yen is likely to be cheered by investors,” said Shoji Hirakawa, chief global strategist at Tokai Tokyo Research Institute Co.  The Topix index rose 0.4% to close at 2,048.52 in Tokyo, while the Nikkei 225 advanced 0.6% to 29,776.80. Toyota Motor contributed the most to the Topix’s gain, increasing 1.1%. Out of 2,180 shares in the index, 1,051 rose and 1,029 fell, while 100 were unchanged. India’s benchmark index ended flat after wholesale prices surged higher-than-expected in October, weighing on metal and financial stocks. The S&P BSE Sensex was little changed at 60,718.71 in Mumbai, while the NSE Nifty 50 Index was flat at 18,109.45. Both gauges gained as much as 0.6% earlier on the back of an earnings season in which a majority of Nifty 50 companies reported results that beat expectations.  Both indexes, however, failed to hold onto their initial advance after wholesale prices rose 12.5% in October, more than economists’ consensus of a 11.1% advance, led by a rise in manufactured products as well as fuel and power prices. Nine of the 19 sector sub-indexes compiled by BSE Ltd. declined, led by gauges of metal and basic materials companies.  India will release monthly trade figures after market hours. The corporate earnings season for the three months ended September finished last week with 29 of the Nifty 50 companies beating analyst estimates. Three companies made their trading debut on Monday, with chemical maker Sigachi Industries rising 267% over its IPO price. One97 Communications Ltd., the operator of digital payments app Paytm which raised $2.5b in India’s biggest IPO, is slated for Thursday. In FX, the Bloomberg Dollar Spot Index slipped with the greenback weaker against all of its Group-of-10 peers. Commodity currencies, led by Norway’s krone, were the best performers. The Treasury curve bull flattened, with yields falling by up to 2bps. The euro hovered around $1.1450; the French presidential election next year is the scheduled event carrying the highest risk for the common currency, according to options gauges. The pound steadied as traders await clues on monetary policy from BOE Governor Andrew Bailey during parliamentary testimony later Monday. U.K. economists expect a rate increase to 0.25% next month, according to a Bloomberg survey. U.K. economists have become more hawkish over the past month and now expect the Bank of England to increase interest rates in December as concerns about inflation intensify. Sweden’s krona inched up after inflation accelerated more than forecast in October. Meanwhile, the Australian dollar rose on data that China’s economy performed better than expected in October. The nation’s sovereign bonds also extended opening gains after China home prices fell again, sapping real-estate shares. Japan’s super-long government bonds underperformed amid concerns that supply may increase to finance government spending. The yen consolidated In rates, Treasury yields broadly within a basis point of Friday’s close, the curve fractionally steeper. The front-end and belly outperform, following bigger gains for Aussie front-end, which attracted buyers during Asia session. Stocks supported, with S&P 500 futures above Friday’s high.  Treasury yields were richer from front-end out to 10-year sector, which trades around 1.55%, outperforming gilts and bunds by ~1bp; long-end cheapens slightly on the day, steepening 5s30s by ~1bp.  Euro- area bonds gained, led by the periphery, following comments on inflation by ECB Chief Economist Philip Lane over the weekend. ECB’s Lane said recent price inflation is “really part of the pandemic” and people should not panic, in an interview with RTE on Saturday. The Fed begins tapered purchase schedule released Friday; schedule departed slightly from Nov. 3 plan by leaving target size of operations in 10- to 22.5-year sector unchanged while trimming 22.5- to 30-year more, which spurred outperfomance by 20-year sector In commodities, crude futures drifted lower with focus on U.S. energy policy and commentary from OPEC speakers. WTI is down 0.6%, trading either side of $80; Brent drops through Asia’s worst levels before running into support near $81. Spot gold fades Asia’s weakness to trade flat near $1,863/oz. Most base metals are in the red with LME nickel underperforming; copper trades flat.  Looking at today's calendar, it's quiet on the news front with just the US November Empire State manufacturing survey on deck. Biden will meet virtually with Chinese President Xi Jinping on Monday. Tensions between the two countries have been building over issues including Taiwan and restrictions on sales of U.S. technology to China. Market Snapshot S&P 500 futures up 0.1% to 4,685.00 STOXX Europe 600 little changed at 487.13 MXAP up 0.4% to 200.95 MXAPJ up 0.4% to 656.76 Nikkei up 0.6% to 29,776.80 Topix up 0.4% to 2,048.52 Hang Seng Index up 0.2% to 25,390.91 Shanghai Composite down 0.2% to 3,533.30 Sensex up 0.1% to 60,771.98 Australia S&P/ASX 200 up 0.4% to 7,470.11 Kospi up 1.0% to 2,999.52 Brent Futures down 0.9% to $81.46/bbl Gold spot down 0.2% to $1,860.89 U.S. Dollar Index little changed at 95.09 German 10Y yield little changed at -0.27% Euro little changed at $1.1447 Top Overnight News from Bloomberg  Federal Reserve Bank of Minneapolis President Neel Kashkari said the U.S. central bank shouldn’t overreact to elevated inflation even as it causes pain for Americans, because it is likely to prove temporary A reduction in China’s reserve requirement ratio looks increasingly unlikely after the authorities rolled over all policy loans coming due and data surprised on the upside, suggesting that bonds will have little room to gain China’s industrial output rose 3.5% in October from a year earlier, while retail sales growth accelerated to 4.9%, beating economists’ forecasts Japan’s gross domestic product contracted at an annualized pace of 3% in the three months through September from the previous quarter, the Cabinet Office reported Monday. Economists had forecast a 0.7% decline Bank of Japan Governor Haruhiko Kuroda said financial stress from the pandemic is limited to certain sectors of the economy, potentially signaling the BOJ is planning to scale back its Covid-era funding program European Central Bank President Christine Lagarde doubled down on her assessment that euro-area inflation will ease as economies rebound, falling back below the 2% target in the medium term. Yet analysts see itfaster than previously thought this year and next A short-lived reprieve for emerging- market carry trades funded in dollars looks to be over, with an upsurge in U.S. inflation making the outlook increasingly treacherous The U.K. is expanding its Covid-19 booster program to younger people as the country seeks to head off another wave of infections this winter. A third vaccine dose will be available to people aged 40 to 49 starting six months after their second shot, the government said Monday Oman said there was no need for OPEC+ to accelerate oil-production increases, signaling at least some members of the group will continue to resist U.S. pressure for more crude   A more detailed look at global markets courtesy of Newsquawk Asian equity markets began the week with a lack of firm direction as the region digested varied tier-1 economic releases including better than expected Chinese activity data and miss on Japanese GDP, with attention also on a slew of earnings results and corporate updates. ASX 200 (+0.4%) and Nikkei 225 (+0.6%) both opened higher and took impetus from last Friday’s gains on Wall Street but with upside in Australia capped as financials and energy lagged, while Japanese participants weathered the weak GDP data which showed a wider than expected quarterly contraction during Q3, when the economy was still mired by widespread state of emergency declarations in key areas including Tokyo and its surrounding prefectures. Nonetheless, Japanese stocks have taken the disappointing economic growth within their strides as it justifies the incoming stimulus package which was said to have been increased to over JPY 40tln in fiscal spending and with Japan reportedly to resume its Go To Travel campaign in mid-January. Conversely, Hang Seng (+0.2%) and Shanghai Comp. (-0.2%) were initially moderately pressured despite stronger than forecast Industrial Production and Retail Sales data from China, as well as the PBoC’s CNY 1tln MLF announcement which matched this month’s expiring MLF loans and further dampened prospects of PBoC easing. Today also saw the launch of the Beijing Stock Exchange which aims to help SMEs raise capital and included 81 companies in the first batch of listings, while participants await the Biden-Xi virtual meeting which is set to take place Monday evening at 19:45EST or Tuesday morning in Asia and with US Treasury Secretary Yellen and Secretary of State Blinken set to join in on the call. Finally, 10yr JGBs are higher as they tracked a marginal rebound in T-notes and following the disappointing Japanese GDP release, but with gains capped as stocks in Tokyo remained afloat and amid the absence of BoJ purchases in the market today. Top Asian News Cathay Crew Who Flew From Frankfurt Doing 21-Day Quarantine Duterte Runs for Philippine Senate, Avoids Clash With Daughter Greenland Jumps in Bond Market After Classification Change Chinese Startup Meicai Is Said to Pick Banks for Hong Kong IPO European equities (+0.1%) trade with minor gains which have nudged the Stoxx 600 to a high of 487.21 in what has been a quiet start to the week. The desk will continue to monitor further lockdown restrictions across the region, however, updates from the Netherlands and Austria have done little to dent sentiment thus far. The handover from the APAC region was a mixed one as the soft GDP data from Japan was overshadowed by forthcoming stimulus efforts whilst Chinese equities were unable to garner much upside from stronger than forecast Industrial Production and Retail Sales data. Participants were also awaiting the Biden-Xi virtual meeting which is set to take place Monday evening at 19:45EST or Tuesday morning in Asia. Stateside, futures are trading with gains of a similar magnitude to their European counterparts (ES +0.1%) with not a great deal on the docket beyond the NY Fed Manufacturing print at 13:30GMT/08:30EST. Back to Europe, sectors are relatively mixed with Travel & Leisure top of the leaderboard amid gains in Deutsche Lufthansa (+1.7%) after the Co. was upgraded to neutral from sell at UBS. Oil & Gas names have been granted some reprieve following the selling pressure seen towards the latter half of last week. To the downside, Basic Resources is the standout laggard amid underlying price action in the metals space. In terms of individual movers, Ahold Delhaize (+2.4%) is one of the best performers in the Stoxx 600 after announcing a EUR 1bln buyback as of 2022, accelerated its growth/investment plan and will explore an IPO of Bol.com. Shell (+1.8%) is seen higher on the session after announcing that it is looking to implement a simplified structure and move its tax residency to the UK from the Netherlands. To the downside, Philips (-12.1%) sits at the foot of the Stoxx 600 as concerns continue to mount over its ventilator recall issues in the US. Finally, BBVA (-3.7%) is seen lower on the session after launching a tender offer to acquire the remaining 50.2% of Turkiye Garanti Bankasi. Top European News U.K. Expands Covid-19 Booster Program to People in Their 40s Austria Locks Down Unvaccinated as Europe Tightens Covid Curbs Cathay Crew Who Flew From Frankfurt Doing 21-Day Quarantine Telefonica Launches Tender Offer for Hybrid Notes In FX, the Aussie and Kiwi are outperforming their major peers, or making the most of ongoing Greenback consolidation off last week’s new y-t-d highs, with the former also gleaning encouragement from Chinese data overnight as ip and retail sales beat consensus. Aud/Usd is back above 0.7350 and Nzd/Usd has reclaimed 0.7050+ status as the Aud/Nzd cross hovers in the low 1.0400 zone and eyes an unusually large 1 bn option expiry at the round number. Similarly, the Norwegian and Swedish Krona are both firmer vs a somewhat leggy/lethargic Euro, but with assistance from macro releases in the form of trade and inflation respectively. Eur/Nok is probing 9.9200 and Eur/Sek is testing bids and support around 10.0000 compared to peaks near 9.9600 and 10.0330. CAD/DXY - No lasting support from crude prices for the Loonie as WTI retreats through Usd 80/brl from Usd 81.20 at best, but Usd/Cad has reversed from 1.2550+ ahead of Canadian manufacturing sales and wholesale trade that are out alongside the more timely Empire state survey. Meanwhile, the index is meandering either side of 95.000 within a 95.152-94.963 band having ‘topped out’ at 95.266 in wake of US CPI and a far from well received new 30 year issue. GBP/EUR/CHF/JPY - All narrowly mixed against the Buck and seemingly awaiting clearer direction from their US counterpart or independently, as Cable continues to straddle a key Fib level (1.3412) in advance of testimony from the BoE on the latest MPR and top tier UK data from tomorrow. Eur/Gbp is sitting even tighter around 0.8530 before talks intensify to try and resolve differences on NI Protocol, while Eur/Usd is pivoting 1.1450, Usd/Chf is rotating around 0.9200 and Usd/Jpy is holding mostly below 114.00. Note, the Euro has ECB speakers to digest (see Headline Feed at 10.01GMT for remarks from President Lagarde) and look forward to, while the Franc has not really responded to small rises in weekly Swiss sight deposits and the Yen has largely brushed aside much weaker than expected Japanese GDP and a draft document saying that the government and BoJ share a strong sense of urgency about supply shortages, whilst maintaining an appropriate combination of monetary and fiscal policies. In commodities, WTI and Brent are softer this morning, with losses in excess of 1.0% on the session thus far. Such pressure stems from demand-side updates in the wake of further COVID-19 measures being announced/implemented, most recently that Austria is entering a lockdown for the un-vaccinated and the Netherlands is to reimpose social distancing from Saturday. Furthermore, given the surge in cases seen in Germany in recent weeks the three-parties in coalition discussions intend to put forward proposals to Parliament on Thursday for renewed measures, which will reportedly include contact restrictions. On the other hand, the supply-side of the equation is cognisant of the looming imposition of further restrictions on Belarus by the EU, particularly as Leader Lukashenko last week said they would respond to any sanctions and suggested closing gas/goods transit through Belarus. Additional sanctions are, currently, scheduled to be announced this afternoon. Separately, and perhaps adding pressure, is commentary from various oil ministers the most pertinent of which has seen the UAE representative announce they are to increase production to over 5mln BPD from the current 4mln by 2030, alongside expecting a Q1-2022 oil surplus. Currently, the benchmarks are in proximity to the sessions trough which resides around USD 0.10/bbl below Friday’s low of USD 79.78/bbl in WTI, for instance. Moving to metals, spot gold and silver have been grinding higher throughout the European morning but are yet to retrace the downside seen overnight in-spite of the stronger Chinese data though this failed to spur regional or base-metal performance either. In terms of bank views, the Head of Energy Research at Goldman Sachs predicting the precious metal is set for a boom to the USD 2k level. US Event Calendar 8:30am: Nov. Empire Manufacturing, est. 22.0, prior 19.8 DB's Jim Reid concludes the overnight wrap This morning I’ve just put out a short note which I hope will win the catchiest research title of the year award. It’s called “If you think real yields are low, look at these charts…”. See here for the link. Regular readers will know my view that inflation will be structurally higher going forward and that for the rest of my career developed market real yields will likely stay negative even if nominal yields climb. This is because with debt so high, history suggests that heavy financial repression will be necessary to manage this. However, nothing could have prepared me for 2021 so far with US CPI at 6.2% YoY in October and 10-year US yields stuck below 1.6%. On a spot basis real yields are c.-4.6% and at around 70-year lows. If you think real yields are low, however, take a look at the 200-year graphs in the note to see that whenever debt has spiked historically, real yields have moved a lot lower than even today’s levels, albeit through inflation around or above 20%. These are extreme times but history offers even more extreme examples. Staying with inflation DB’s Francis Yared and I did a webinar on inflation last week and the recording can be viewed here. You’ll need Francis’s slides at hand on Regime Shifts in Inflation (link here) and mine (link here) on what history can tell us about inflation and what it means for asset prices in the future. I thought it was a really good webinar but I am slightly biased. Maisie and mum came back from a week in hospital at the weekend. Mum slept for 18 hours on Saturday leaving me to work out how the wheelchair folds up and reopens and delivering what I hoped was the right dose of morphine. It’s going to be tough living with a wheelchair for the next year as Maisie’s hip bone tries to regrow but after hearing many stories from my wife about children in the ward with life threatening conditions you realise that you’re actually pretty lucky. Before you think I’ve gone all zen, I did nearly throw the wheelchair across the room when it wouldn’t unfold. I’d missed a small lever under the seat. After a tiring last week at home and in the markets it’s a quieter week ahead in terms of the calendar, though market attention will continue to focus on the question of who might be appointed as the next Fed Chair, as well as the latest inflation statistics from a number of countries, including the UK (Wednesday). There is a reasonable amount of Fedspeak so it’ll be especially interesting to hear those on the transitory side to see if last week’s shocking print has impacting their thinking. Otherwise, geopolitics will be in focus, with today’s virtual meeting between US President Biden and Chinese President Xi, alongside continued speculation about whether the UK might trigger Article 16 of the Northern Ireland Protocol even if tensions have eased a touch in the last few days. Starting with today’s virtual meeting between President Biden and President Xi, it is set to take place at 7:45 PM Washington time, which will be 8:45 AM on Tuesday in Beijing. While both the presidents spoke over the phone twice this year, this is the first time it is being dubbed as a summit. There is some thought that tariff reductions could be on the agenda, especially given current US inflation levels but it might be a bit early for that in any relationship rebuild. We’ll know more in time for tomorrow’s EMR. The monthly Chinese data dump came in better than expected overnight with industrial output +3.5% yoy (vs. 3% expected), retail sales 4.9% yoy (vs 3.7% expected) but fixed-asset investment slightly missing at 6.1% (vs 6.2% expected). There is some discussion that the retail sales beat may be led by higher prices and also higher food sales as consumers prepare for the possibility of winter virus restriction. Asian stocks are trading mixed with the KOSPI (+1.04%) and the Nikkei (+0.48%) trading in the green while the Hang Seng (-0.08%), Shanghai Composite (-0.29%) and CSI (-0.29%) trading lower. In Japan GDP shrank by -0.8% from the last quarter (-0.2% consensus and +0.5% previous) augmenting expectations of a stimulus package by Prime Minister Fumio Kishida, which is expected to be announced at the end of this week. The Nikkei reported last Friday that the stimulus could top 40 trillion yen ($350 bn). Futures are pointing to a muted start in US & Europe with S&P 500 futures (-0.01%) and DAX futures (-0.08%) both fairly flat. Moving onto the rest of the week, there are a few decisions from EM central banks over the week ahead, including Turkey, South Africa and Indonesia (all Thursday). However, the main focus for investors will be the speculation about who might be the next Fed Chair, particularly in light of the news out last week that both incumbent Fed Chair Powell and Governor Brainard had been interviewed for the position. Powell’s current four-year term comes to an end in February, and whoever’s nominated would require senate confirmation for another term. At this point 4, 8 and 12 years ago, the announcement of who’d be nominated had already been made, but we still don’t have a date for when we might get the news. However, it may not be too far away, with President Biden saying in Glasgow on November 2 that it would be “fairly quickly”. On the data side, there’ll be an increasing amount of hard data out of the US for October, including retail sales, industrial production (both Tuesday) and housing starts (Wednesday). Meanwhile, there’ll also be some important UK data as the Bank of England mulls over their monetary policy settings ahead of their meeting next month. On Tuesday, there’s the latest employment report, and then on Wednesday, we’ll get the latest CPI reading for October. Turning to politics, it’s worth keeping an eye out for any developments on Brexit, with speculation rising that the UK government could trigger Article 16 of the Northern Ireland Protocol. Over the last 3 or 4 days the mood music has moved a little towards compromise so we’ll see if this gathers some momentum. Lastly on the earnings front, it’s the tail end of the season now, but there are still a few major companies left to report. Tomorrow we’ll hear from Walmart and Home Depot, before Wednesday brings reports from Nvidia, Cisco, Lowe’s and Target. Then on Thursday, we’ll hear from Intuit, Applied Materials and TJX. Recapping last week now and inflation had a strong stranglehold on the market narrative, as much higher-than-expected US CPI data drove Treasury yields higher, led by the belly of the curve. Global sovereign yields increased in sympathy. Quickly recapping the highlights from the pivotal CPI data: year-over-year headline CPI of 6.2% and core CPI of 4.6% were each the highest readings since the early 1990s and we’re generally getting to levels last seen consistently at the start of the 40yr disinflationary trend in the early 1980s. Price gains were shared across a broad range of components, which prompted some rabble rousing out of Democratic politicians, including President Biden. Five-year Treasury yields increased +13.5 bps as investors brought forward the expected timing of increases to the fed funds rate. Markets are pricing the first Fed rate hike by the July FOMC and 2.5 hikes through 2022. This compares with a September FOMC lift-off and fewer than 2 hikes in 2022 a week before. All told, 2yr, 5yr, and 10yr Treasury yields increased +11.7bps (+0.5bps Friday), +17.1bps (+1.0bps Friday), and +11.9bps (+2.1bps Friday) on the week. 10yr inflation breakevens hit their highest levels on record, finishing the week at 2.72%. Real yields were the only rates declining on the week, with 10yr real Treasury yields retreating -6.6bps (+0.8bps Friday) to end the week at -1.17%, just above all-time lows. Other developed sovereign bond yields followed Treasuries higher, with ten-year yields in Germany, UK, France, and Italy increasing +2.1bps (-2.8bps Friday), +6.9bps (-0.6bps Friday), +3.5bps (-2.8bps Friday), +7.8bps (-0.8bps Friday) on the week. The spectre of higher inflation and concomitant monetary policy tightening put an end to the recent S&P 500 win streak. After posting eight straight days of record highs by Tuesday, the S&P 500 retreated -0.31% this week, including -0.82% on Wednesday alone following the inflation data, but made a heroic effort to reclaim lost ground Friday, gaining +0.72%. Mega cap stocks were notable laggards, due to the increase in discount rates, with FANG+ stocks down -0.49% (+1.00% Friday). The index was also hit by a -15.44% collapse in Tesla stocks following news that Elon Musk would liquidate some of his holdings, which he duly did. European stocks proved more resilient, with the STOXX 600 (+0.68% on the week, +0.30% Friday), DAX (+0.25%, +0.07%), and CAC 40 (+0.72%, +0.45%), again posting new all-time highs to finish the week. On the virus front, Pfizer requested regulatory approval for all US adults to be eligible to receive the company’s Covid-19 booster shot, while climbing cases in Europe have prompted renewed lockdown measures and enhanced vaccination efforts across the continent. Federal Vice Chair for Supervision Quarles announced he would resign at the end of the year, as was widely anticipated. There was a steady leak of news on the impending nomination for Fed Chair, but neither Chair Powell nor Governor Brainard, the two favorites for the position, saw their chances much changed following the news. The Fed also released its bi-annual Financial Stability Report and concluded that asset prices remain vulnerable to deteriorating investor risk sentiment, virus progress, or economic recovery. Geopolitical tensions bubbled in Europe. Threats from Belarussian President Lukashenko to cut the transit of natural gas from Russia to Europe, and reports of potential Russian plans for further military excursions into Ukraine, drove European natural gas prices higher in the second half of the week. President Putin apparently warned the US and its allies that Moscow would not tolerate expansion of Western military influence in Ukraine. Tyler Durden Mon, 11/15/2021 - 07:59.....»»

Category: blogSource: zerohedgeNov 15th, 2021