Perhaps today’s biggest question is whether or not Iran is a rational actor. To date the regime’s actions do not match their words. While I will not opine about the killing of Soleimani, the rhetoric from some in the US as well as in Iran is intense. Some are ardently writing last week’s events are … Read more
Many times I have commented about the lack of liquidity, primarily the result of regulatory fiat, trading mechanics and passive investing. Considerable attention has been focused on the liquidity issues of the repo market, liquidity that is being provided by the lender of last resort—the Federal Reserve. Several times I have discussed the implosion of … Read more
Natixis SA, the large French bank, plunged almost 14% yesterday after MorningStar cited concerns about the “liquidity and appropriateness” of some corporate bond holdings in a fund owned by the Bank. Natixis’s woes added to the rising liquidity fears following the implosion of Neil Woodford and the Woodford funds, one of UK’s most famous stock … Read more
Is the circus in Washington beginning to weigh on the markets? To date Washington has been viewed nothing other than a freak show, a made for reality TV and cable show. Has all crossed over the proverbial lines? Perhaps the only concrete statement to make that if a public company acted in a similar manner … Read more
Equities rose, the result of earnings and stronger than expected economic data. Trade tensions still remained at the forefront albeit was not weighing upon market sentiment. Oil also rose on rising Persian Gulf tensions, tensions that some believe are at the brink of war. As noted yesterday a geopolitical premium is all but absent in … Read more
Some have remarked I have focused to intensely on oil. A major reason for this myopicy is the close correlation between oil and equities since July 2014. The correlation is over 90% according to Bloomberg. It has often been written the most obvious conclusions are those which are ignored. Many times I have compared 2014-16 … Read more
As widely reported, at one time yesterday the market was experiencing its worst first day of trading since 1932. After a late afternoon partial recovery, markets had it worst first day of trading in 15 years, its sixth poorest start of new year trading since 1932 according to Bloomberg. I am certain there will be … Read more
Tomorrow is a “technical meeting” of OPEC members. There is little talk of curtailing production albeit all of its members are hemorrhaging money. Because of the 45% drop in price, the largest and perhaps OPEC’s most financially secure country, Saudi Arabia, is delaying payments to government contractors. Wire services report that some companies have not … Read more
As noted several times, the Federal Reserve has added another variable into its monetary policy making process…international growth, specifically China. Until September all were fixated on the unemployment statistics as this was the FOMC’s stated variable. While we can discuss the validity of the 5.1% unemployment rate (i.e. the implications of a 40 year low … Read more
Equites rose yesterday, led by the sectors that were battered in the worst selloff since the third quarter of 2011. As widely known some sectors have plunged about 25% since June 30. Some of the must owned names in these sectors are down over 35% in the same period. Markets were encouraged by an upbeat … Read more
