Viernes 12/02/16 Ventas retail, inventarios de negocios

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+249.21

[Fenix]

S&P 500 Approaching Significant Levels
02/12/2016 09:01 -0500
Via Dana Lyons' Tumblr,

The correction in the equity markets has brought the S&P 500 down close to a confluence of key technical levels.

People ask us all the time what we view as the important “levels” in the stock market, e.g., “what is our target level for the Dow?” or “what level will put an end to the correction?”. To be honest, while we do have our areas on the various charts that we view as significant, we are less focused on price levels than we are on the behavior of various market indicators and investors. Levels can be helpful, but sometimes prices overshoot what they “should” and sometimes they don’t quite make it “there”. That’s why we rely on a set of indicators based on market internals, momentum, investor positioning, etc. to help guide our investment posture, i.e., aggressive, defensive, etc.

That said, as I mentioned, we do view certain levels on a chart as significant if prices do happen to reach, or breach, them. And since A) people are most interested in the S&P 500 and B) that index is approaching some potentially key levels, we thought we would present it as our Chart Of The Day.

One thing of note that we have mentioned several times before is that, of all the securities and indices, etc. that one wants to chart technically, the S&P 500 is one of the most unreliable. We have found that typically, the degree of adherence to technical levels is inversely correlated to the number of participants trading it. That is, the more people attempting to technically trade a price series, the less apt it is to conform to traditional technical analysis.

This is not a scientific conclusion but rather an observation of ours. But it does make sense because A) the more competition there is, the more difficult it will be to win, and B) the more participants there are watching the same thing, the more likely it will be that HFT’s, computers or large institutions will be “gaming” that “thing”. And perhaps no instrument has more eyes on it than the S&P 500. That means it is a relatively difficult thing to successfully trade based on traditional technical analysis. Yet, for some reason, everybody feels the need to be involved with it.

With all that said, here are some levels of potential importance, in our view, that are fast approaching based on the S&P 500′s current selloff. Again, the levels are not as precisely aligned as they are on some indices (e.g., the Value Line Geometric Composite), because there are too many eyeballs on it. However, the following 5 significant levels are generally within the same vicinity between 1748-1790, making it a key confluence of potential support.


? 23.6% Fibonacci Retracement of 2009-2015 Rally ~1790

? 38.2% Fibonacci Retracement of 2011-2015 Rally ~ 1748

? 61.8% Fibonacci Retracement of 2013 Breakout-2015 Rally ~1780

? 1000-Day Moving Average ~1774

? Post-2009 Up Trendline ~1760


You may be thinking that, if the S&P 500 reaches these levels, it will mean that the January 20 low will have been breached. How could the index be expected to hold any nearby levels then? Remember that there are tons of folks watching for a break of that January low as a bearish signal. While we are not saying a breach of the low would be a positive, remember that there is a ton of money watching the “watchers” with the goal of manipulating their traditional expectations. That may be less than clear so just remember, if you’re trading the S&P 500 or any other heavily traded instrument, do not be surprised by the unexpected.

Will these levels pan out as support? Will they even be reached? We have no idea. That’s why we focus on other metrics to inform our investment decisions. However, we would expect this confluence of levels to at least offer an attempt at support.

[admin]

15968.32 308.14 1.97%
Nasdaq 4340.02 73.18 1.72%
S&P 500 1864.24 35.16 1.92%
Russell 2000 971.49 17.77 1.86%
Global Dow 2069.94 22.50 1.10%
Japan: Nikkei 225 14952.61 -760.78 -4.84%
Stoxx Europe 600 312.41 8.83 2.91%
UK: FTSE 100 5707.60 170.63 3.08%
CURRENCIES3:20 PM EST 2/12/2016
LAST(MID) CHANGE
Euro (EUR/USD) 1.1249 -0.0075
Yen (USD/JPY) 113.36 0.93
Pound (GBP/USD) 1.4502 0.0024
Australia $ (AUD/USD) 0.7102 -0.0007
Swiss Franc (USD/CHF) 0.9766 0.0041
WSJ Dollar Index 89.01 0.25
GOVERNMENT BONDS3:20 PM EST 2/12/2016
PRICE CHG YIELD
U.S. 10 Year -25/32 1.747
German 10 Year -23/32 0.263
Japan 10 Year -20/32 0.075
FUTURES3:10 PM EST 2/12/2016
LAST CHANGE % CHG
Crude Oil 29.16 2.95 11.26%
Brent Crude 33.64 2.86 9.29%
Gold 1239.2 -8.6 -0.69%
Silver 15.755 -0.039 -0.25%
E-mini DJIA

[admin]

El petróleo subió 12%

Dimon compra 500,000 acciones de JPM

[admin]

Energéticas y bancos lideran recuperación de Wall Street tras semana difícil

Por Aastha Agnihotri

(Reuters) - Wall Street se recuperaba el viernes gracias a un repunte de las acciones financieras y energéticas tras cinco días consecutivos a la baja por temores sobre la salud de la economía global y la situación del sector bancario.

* A las 1726 GMT, el promedio industrial Dow Jones subía 229,6 puntos, o un 1,47 por ciento, a 15.890 unidades. El índice S&P 500 avanzaba 27,18 puntos, o un 1,49 por ciento, a 1.856,28, mientras que el Nasdaq Composite ganaba 56,17 puntos, o un 1,32 por ciento, a 4.324,25 unidades.

* Nueve de los 10 principales sectores del índice S&P 500 subían, liderados por el sector financiero, que escalaba un 3,68 por ciento. Seis de las acciones que más subían en el S&P 500 correspondían a firmas del sector financiero, que ha caído un 15 por ciento este año.

* Los títulos bancarios, que fueron los más golpeados por preocupaciones sobre el impacto de tasas de interés negativas e incumplimiento de préstamos respaldados por energéticas, eran los que más subían, liderados por un avance de 8,04 por ciento de los títulos de JPMorgan.

* Los papeles energéticos y de materiales avanzaban cerca de un 2,5 por ciento. Ambos sectores han sido golpeados por un desplome de los precios de las materias primas este año.

* Los precios del crudo en Estados Unidos subieron un 11 por ciento y el Brent saltó un 8,4 por ciento, recuperándose desde mínimos de 2003 por perspectivas de un recorte coordinado en la producción.

* Un reporte mostró que el gasto del consumidor estadounidense recuperó su fuerza en enero, en una señal esperanzadora para el crecimiento económico. [nL2N15R18L]

* Los papeles de JPMorgan saltaban un 8,1 por ciento, a 57,37 dólares, después de que su presidente ejecutivo, Jamie Dimon, compró más de 25 millones de dólares en acciones del banco.

* Los títulos de Activision Blizzard caían un 9,7 por ciento, a 27,53 dólares, después de que el fabricante de videojuegos reportó ingresos y ganancias trimestrales menores a lo esperado.

[Fenix]

14:17 Mondelez International: soporte en torno a 32.1
Trading Central
Nuestro punto de rotación se sitúa en 39.8.

Nuestra preferencia: la caída se mantiene siempre que la resistencia se sitúe en 39.8.

Escenario alternativo: por encima de 39.8, objetivo 42.5 y 44.1.

En lo referente al análisis técnico, el índice de fuerza relativa (RSI) se encuentra por debajo de su zona de neutralidad de 50. El indicador de convergencia/divergencia de medias móviles (MACD) se sitúa por debajo de su línea de señal y es negativo.

Asimismo, la acción se sitúa por debajo de su media móvil de 20 y 50 días (se sitúa a 40.09 y 42.31 respectivamente).


Los tres focos de incertidumbre que dominan el mercado

Santander Private Banking
Viernes, 12 de Febrero del 2016 - 14:32:00

El mercado ha entrado en una nueva dimensión: el debate reside ahora en si la economía mundial, de la mano de EEUU, se dirige a una recesión en los próximos doce meses. A fecha de hoy, otorgamos una probabilidad baja a la materialización de ese escenario.

Tres focos de incertidumbre han dominado el comportamiento del mercado en el inicio del ejercicio 2016, derivando en uno de los peores meses de enero para los activos financieros en perspectiva histórica.

Dos “viejos conocidos”, ya presentes en el episodio anterior de zozobra acaecido el pasado verano, –China y petróleo-, y un tercero, potencial consecuencia de la combinación de ambos: una eventual recesión económica global, con epicentro en EEUU.

China es, por sí misma, una variable de la magnitud suficiente para hacer descarrilar la economía mundial y las bolsas durante el resto de esta década, y crear un mercado estructuralmente bajista prolongándose durante muchos años. Pero esto sólo ocurriría si sus autoridades pierden el control del tipo de cambio del yuan, produciéndose una abrupta depreciación que desembocara en una devastadora salida de capitales de esta economía.

Sin embargo, a día de hoy, la materialización del escenario descrito nos parece poco probable. El colchón de ahorro con el que cuenta China y la holgada capacidad de maniobra que le confieren las reservas en moneda extranjera que aún acumula en su balance son herramientas que terminarían sirviendo de estabilizadores, poniendo coto a futuros procesos de huida de capitales.

Y las dudas renovadas en el comienzo del año sobre la salud cíclica del gigante asiático volvieron a ser posteriormente matizadas con la publicación del crecimiento del PIB, que arrojaba un avance en 2015 del 6,9%, muy alineado con los objetivos oficiales. La transición del modelo productivo de China sigue en marcha: el sector servicios supone ya más del 50% del PIB. En consecuencia, la desaceleración de China continuará, aunque nuestra tesis sigue siendo que permanezca encuadrada dentro de coordenadas moderadas y manejables.

Las incógnitas acerca de China precipitaron en enero la caída de la cotización del petróleo por debajo de los 30 dólares estadounidenses por barril. Pero… ¿es malo un crudo barato para el ciclo? Con el prisma negativo que parece haber adquirido el mercado como patrón de conducta a raíz de las turbulencias en el mercado chino se deduciría que sí.


Nada más lejos de la realidad: la transferencia neta de riqueza desde los exportadores netos de crudo (43% del PIB agregado a nivel global) a los importadores netos (57%) generaría un efecto positivo en términos de impulso al crecimiento, sobre todo vía incremento de la renta disponible en las economías OCDE, considerando además que los importadores de petróleo tienen una mayor propensión al gasto que los exportadores.

Además, el abaratamiento energético contrarrestaría la presión sobre los márgenes empresariales derivada del repunte previsto en los salarios nominales.

Si utilizamos el descenso del precio del petróleo como “el canario en la mina” que sirva para adelantar una recesión económica, la experiencia histórica nos dice que no es el mejor predictor. Todas las recesiones mundiales registradas desde 1970 estuvieron precedidas por un sensible repunte de la cotización del crudo, mientras que, por el contrario, casi todas las caídas en su precio superiores al 30% vinieron seguidas de una aceleración del crecimiento y un buen tono del mercado bursátil.

Por supuesto, comportamientos pasados no son garantía de dinámicas futuras, pero, al margen de los segmentos de actividad más ligados a las materias primas o a los bienes de capital, apenas se han observado en los países desarrollados hasta la fecha señales de deterioro a nivel macroeconómico o de resultados corporativos. Es más, los sólidos fundamentales que presenta la variable consumo privado en EEUU nos llevan a asignar sólo una probabilidad de recesión a doce meses vista del 20% para la primera economía del mundo.

Llegado este punto, y considerando la severidad del castigo a los activos de riesgo en tan poco tiempo, hay que plantearse si la tendencia primaria alcista del mercado bursátil estaría empezando a tornar bajista, escenario por el que no apostamos.

¿Qué factores históricamente han propiciado esta transición? Una recesión económica global, que, como hemos indicado, se antoja improbable. Una política monetaria endureciéndose de forma agresiva; en la actualidad, en las antípodas de esa situación a tenor de los niveles de precios. O una burbuja de valoración, que no es el caso en las bolsas globales a día de hoy. En conclusión, la penalización a los activos de riesgo nos parece excesiva, y el activo bursátil nos sigue pareciendo el que mejor binomio rentabilidad/ riesgo presenta con la vista puesta a finales de 2016.

[Fenix]

Niveles a vigilar en el S&P 500

Análisis técnico Citi
Viernes, 12 de Febrero del 2016 - 15:23:00

Una vez más, los factores externos pueden ser el motor principal para las acciones estadounidenses y como resultado podríamos ver otro descenso del 22%. Tal escenario nos dejaría un objetivo teórico para el S&P 500 en 1.660. Estos los niveles a vigilar...

El S&P 500 se acerca a zonas áreas de apoyo importantes:

1.812-1.820: los principales mínimos (incluyendo el de enero de este año) vistos en los últimos 24 meses

1.760-1.790: línea de tendencia alcista que se remonta a 2009 y la media de 200 semanas, respectivamente. La caída a la media de 200 semanas también cierra el movimiento desde la media de 55 sesiones.

Una ruptura por debajo de estos niveles, si se ve, abriría el camino hacia la ya mencionada zona de 1.660 que daría lugar a una corrección del mercado similar a la observada en 1998 y 2011.

Una extensión del movimiento, que en este momento no es nuestro caso base, podría ver al S&P 500 repitiendo los principales soportes alrededor de 1.552-1.576, que incluye los principales máximos del mercado en 2000 y 2007, junto con el 38,2% de retroceso de todo el rally 2009 -2015.


Why NIRP (Negative Interest Rates) Will Fail Miserably
02/12/2016 09:51 -0500
Submitted by Charles Hugh-Smith

What NIRP communicates is: this sucker's going down, so sell everything and hoard your cash and precious metals.

The last hurrah of central banks is the negative interest rate policy--NIRP. The basic idea of NIRP is to punish savers so severely that households and businesses will be compelled to go blow whatever money they have on something--what the money is squandered on is of no importance to central banks.

All that matters is that people and enterprises are forced to spend whatever cash they have rather than "hoard" it, i.e. preserve and conserve their capital.

That this is certifiably insane is self-evident. If an economy depends on bringing future spending into the present by destroying savings, that economy is doomed regardless of NIRP, for eventually the cash runs out and spending declines anyway.

But NIRP will fail completely and totally due to another dynamic-- one I addressed last month in Another Reason Why the Middle Class and the Velocity of Money Are in Terminal Decline. As correspondent Mike Fasano noted, negative interest rates force us to save even more, not less:

"People like me who have saved all their lives realize that they their savings (no matter how much) will never throw off enough money to allow retirement, unless I live off principal. This is especially so since one can reasonably expect social security to phased out, indexed out or dropped altogether. Accordingly, I realize that when I get to the point when I can no longer work, I'll be living off capital and not interest. This is an incentive to keep working and not to spend."

If banks start charging savers interest on their cash, savers will have to save even more income to offset the additional costs imposed by central banks on their savings.

A third dynamic dooms the insane negative interest rate policy: what does it say about the stability and health of the status quo if central banks are saying the only way to save the status quo is to force everyone to empty their piggy banks and spend every last dime of cash?

What exactly are we saving by destroying savings and capital? Isn't capital the foundation of capitalism? The answer is we are saving nothng but a rotten-to-the-core, parasitic, predatory banking system, coddled and enabled by corrupt central banks and states.

What NIRP says about central banks is that they have run out of options and are now in their own end zone, heaving the final desperate Hail Mary pass that has no hope of saving them from complete and total defeat.

NIRP also says the economy that needs NIRP is sick unto death and doomed to an implosion of impaired debt, over-leveraged risk-on bets and asset bubbles generated by stock buybacks and central bank purchases of risky assets.

The central bankers are delusional if they think NIRP will inspire confidence in investors, punters, households and enterprises. Rather, NIRP signals the failure of central bank policies and the end-game of credit expansion as the solution for all economic ills.

What NIRP communicates is: this sucker's going down, so sell everything and hoard your cash and precious metals. If that's what the central banks want households and enterprises to do, NIRP will be a rip-roaring success.

[admin]

Anglo American reorganiza pequeña mina de cobre en Chile; recorta 10 pct de personal
viernes 12 de febrero de 2016 15:59 GYT Imprimir [-] Texto [+]
SANTIAGO (Reuters) - Anglo American dijo el viernes que pondrá en marcha un plan de optimización de su pequeña mina chilena de cobre El Soldado debido al complejo panorama por el derrumbe de los precios del metal, que incluye la reducción de un 10 por ciento de la nómina.

Anglo explicó en un comunicado que busca asegurar la continuidad operacional del yacimiento -que produjo 36.000 toneladas de cobre en 2015- a través de una reducción en el movimiento de mina, aumento de la producción de planta y ahorros por eficiencias operacionales y gestión de contratos y suministros.

"Las actuales condiciones de mercado han puesto en riesgo su continuidad operacional. Por eso, hemos revisado diversas opciones que nos permitan evitar su cierre", dijo el jefe de cobre de la firma, Hennie Faul.

"Este ajuste resultará en la desvinculación de un 10 por ciento de la dotación total de la faena, lo que representa la reducción de aproximadamente 150 puestos de trabajo, considerando trabajadores propios y contratistas", agregó la empresa.

Varias mineras han reducido operaciones y recortado personal en sus operaciones en medio de la debilidad del precio del cobre, que este año ha llegado a tocar mínimos de seis años y medio.

La minera espera que el plan le permita alcanzar un equilibrio en su flujo de caja hacia fin de año.

El Soldado forma parte de la unidad Sur de Anglo American, en la que está asociada con la estatal local Codelco y las japonesas Mitsui y Mitsubishi.

(Reporte de Fabián Andrés Cambero;

[Fenix]

Publicado el Jueves, 11 de Febrero del 2016

VICTOR GILL RAMIREZ // Cautela de la Fed con alza en las tasas
El Vocero / La economía de Estados Unidos va hacia un lado positivo, aunque bajo observación continua ante los indicadores externos, por lo que futuros aumentos en tasas de interés es algo que la presidenta del Banco de la Reserva Federal (Fed), Janet Yellen, pondera con detenimiento y ha dicho que "dependerá de lo que nos digan los reportes sobre el panorama económico".

No obstante, previo a su comparecencia ayer ante el Congreso, prevaleció la preocupación en sectores financieros, al trascender que la Fed había hablado hace dos semanas a los principales bancos sobre incluir en una próxima ronda de "stress test" un escenario hipotético de tasas de interés negativas.

La situación en China y las repercusiones en la economía mundial, mantienen a todos muy cautelosos en sus decisiones y proyecciones, pero como explicó el comisionado de Instituciones Financieras de Puerto Rico, Rafael Blanco, "una política de intereses negativos (Negative Interest Rate Policy o NIRP) es una política monetaria que se implanta cuando una economía lenta apunta a una deflación".

Ese no es el caso de Estados Unidos, pero Yellen puntualizó ayer que a pesar de los buenos signos en la nación americana, el desempeño de China "exacerbó la inquietud sobre el panorama del crecimiento económico mundial".

"Al implantarse dicha política monetaria (NIRP), el Banco Central del país en cuestión, en vez de pagar intereses a sus bancos miembros por sus depósitos, les cobra dinero por guardarles el mismo. Igualmente, los bancos comerciales, en vez de pagar intereses a sus clientes por sus depósitos, les cobran una fracción porcentual por darles el servicio de depósito. Esto entonces incentiva a que los bancos presten más para poner a producir dinero en vez de pagar por tenerlo inerte. Igualmente, los individuos, en vez de ahorrar y pagar por el ahorro prefieren comprar y realizar inversiones, lo cual estimula la economía", señaló Blanco.

Aclaró que eso no está propuesto, pero la Fed "quiere que los bancos miembros realicen un análisis (stress test) sobre el impacto en sus operaciones y resultados en la eventualidad que tal política fuera a adoptarse. Para que dicha política monetaria se adopte, el Fed tendría que concluir que la economía norteamericana está en deflación y que meramente bajar la tasa a cero no resulta en un estímulo suficiente para reactivarla".

Por su parte, Ramón Rosado Linera, vicepresidente senior y tesorero de Oriental, ilustró que el fenómeno de tasas de interés negativas se ha visto en el pasado reciente en algunas situaciones particulares en los Estados Unidos. "Por ejemplo, hemos visto como el rendimiento de cierta deuda a corto plazo emitida por el Tesoro de EEUU ha traficado a rendimientos negativos cerca de los cierres de trimestre. Además, algunos de los grandes bancos comerciales en su momento ofrecieron tasas negativas en sus cuentas de depósito para desincentivar entradas adicionales de depósitos. Lo que no se ha visto hasta el momento es que la estrategia de la Reserva Federal para cumplir su mandato dual de maximizar los empleos y controlar la inflación conlleve tasas referenciales negativas", opinó Rosado Linera.

Sin embargo, el ejecutivo de Oriental añadió que "el hecho que la Reserva Federal incluya una tasa de rendimiento de negativo 0.50% para deuda del Tesoro a 90 días entre los supuestos a ser utilizados en los análisis de solidez de capital conocidos por las siglas CCAR es un reconocimiento de que no es un escenario descabellado. Sin embargo, debemos reconocer que ese supuesto aplicaría solo a la simulación más severa a ser corrida bajo el CCAR y no aplicaría al escenario base. Además, las tasas a largo plazo se mantendrían positivas en esa simulación más severa". Recordó que la Fed aumentó las tasas referenciales hace dos meses.

Cautela de la Fed con alza en las tasas

[admin]

+313.63 a 15,973.84 puntos.

[Fenix]

¿cuántos millones de US$ tendrá la FDIC para cubrir los depósitos?


Americans' "Deflationary Mindset" Has Never Been Stronger
Submitted by Tyler D.
02/12/2016 - 10:20

Having already warned of a "deflationary mindset," today's University of Michigan Confidence data suggests Americans are falling deeper into dis-inflation territory. Today's headline tumble in confidence to 4-month lows, with "hope" dropping to 6-month lows is dominated by the plunge in 5-10 year inflation expectations to 2.4% (from 2.7%) - a 36-year record low.


More Bad News For European Banks? ECB Leaks "Firm Support For A Deposit Rate Cut"
Submitted by Tyler D.
02/12/2016 - 10:27

After starting out strongly this morning, with DB stock trading just shy of $17/share, European banks have seen some weakness in the past 30 minutes following a report from Reuters, in which sources were cited as saying that there is "firm support for a deposit rate cut within the European Central Bank's Governing Council."


Don't Show Bill Dudley This Chart
Submitted by Tyler D.
02/12/2016 10:59 -0500

The Fed's Bill Dudley just unleashed the most cognitively dissonant statement of his career. That superlative is highlighted by theses two headlines:

* DUDLEY SAYS U.S. ECONOMY IS IN QUITE GOOD SHAPE
* DUDLEY: DON'T SEE NEGATIVE RATES HAVING 'BIG CONSEQUENCE'

Try telling The BoJ's Kuroda that!!

1) BoJ NIRP
2) "No big consequence?"


Nope - no consequence at all...

Yet again his comments confirm The Fed's utter confusion...

Today:

* DUDLEY: MANY STEPS BEFORE FED WOULD CONSIDER NEGATIVE RATES


Yesterday:

* YELLEN: FED LOOKING AT NEGATIVE RATES AGAIN

[Fenix]

El oro como refugio

Viernes, 12 de Febrero del 2016 - 15:52:00

Miren este gráfico. ¿Decoupling o el oro como refugio? Esto último, naturalmente. Veámoslo desde una perspectiva de medio plazo. Los intentos de ruptura de la resistencia del oro en 1208 $ suponen cuestionar su tendencia bajista desde 2013.

Las bolsas, en el caso del gráfico para el S&P, ya hace tiempo que ha roto la tendencia alcista iniciada en 2012.

Al final, el oro hace honor a su papel de refugio ante la incertidumbre.

Y es precisamente esta incertidumbre la que deja obsoletas las estadísticas sobre oferta y demanda de finales de 2015 que ayer mismo publicó el World Gold Council.

Con todo, parte de mi trabajo como “forense” es valorarlas.

En definitiva.


En toneladas, aumento de la demanda del 4 % en el último trimestre del año pasado cuando la oferta se reducía un 10 %.

En el año la relación ha sido de un comportamiento nulo de la demanda con ajuste del 4 % en la oferta.

Dentro de la demanda, el fuerte aumento de la inversión y bancos centrales, aunque sólo en el primer caso por debajo de la demanda promedio del mismo periodo en los últimos cinco años (298.9 tn. inversión frente a 194.6 tn). Las 167.2 tn de compra de oro por los bancos centrales fue superior a los 133 tn. promedio antes. Importante la compra de oro por Rusia, cuando China publicó la mayor acumulación de oro de los últimos años.

En términos de la demanda por joyería (descenso del 1 % en la última parte del año pasado y 3.0 % en el conjunto del año), la diferencia fue evidente entre India (+6 %) y China (-1 %). Entre las dos suponen el 50 % de la demanda de oro por joyería, cuando esta representa un 70 % de la demanda total de oro.

¿Y ahora qué? Técnicamente, el siguiente reto para los precios del oro es el nivel de 1300 $ onza.

Son niveles de principios de 2015.

Veremos.

José Luis Martínez Campuzano
Estratega de Citi en España


Oil Soars Most Since Feb 2009 On OPEC Production Cut Headline Redux
Submitted by Tyler D.
02/12/2016 11:08 -0500

Another day, another OPEC Production Cut rumor, and another massive swing in WTI Crude oil prices. But having run stops to these levels, we wonder what happens next?

This 11.5% ramp is among the biggest single-day moves in oil's history...

Driving realized volatility near record highs...

But sadly, stocks are not correlating...



637 Rate Cuts And $12.3 Trillion In Global QE Later, World Shocked To Find "Quantitative Failure"
Submitted by Tyler D.
02/12/2016 - 11:30



Here Is The ETF Liquidation That Sent Shockwaves Through The Crude Oil Market
Submitted by Tyler D.
02/12/2016 12:13 -0500

A week ago we exposed the real reason for the "crazy volatility" in crude oil markets, and specifically the driver of the immense rally (despite weak data) in crude - a massive liquidation of the triple-inverse ETF DWTI. Today we have another mysterious, even larger spike in crude oil prices (for no good reason other than 'old' misunderstood rumors about OPEC production cuts). The driver, it would appear, is another liquidation as the ETF trades at a huge discount to NAV. The last time this happened, it didn't last.

We saw the same actin last week (and the delayed data exposed the liquidtaion)... it's happening again...

And DWTI is trading at a dramatic discount to NAV - which suggests - given the day lag (There is a day's lag between when redemptions and creations are ordered and when they show up in share figures) that buying pressure hits today...

On Wednesday, oil prices surged more than 8 percent to $32.28 a barrel, despite a seemingly bearish report from the U.S. Energy Information Administration showing nationwide crude inventories rose by 7.8 million barrels last week.

The evidence is even clearer in the sudden spike in the 1st-2nd month spread - despite no news whatsoever on the storage constraints (as ETF managers are forced to buy back futures in the front-month as the inverse ETF is liqudated)

So that explains the sudden squeeze carnage today... and without further liquidation in the fund whythe rip won't hold.

[Fenix]

How €3.5 Trillion In NIRP Debt Made Europe's Credit Market "Most Vulnerable Since Lehman"
Submitted by Tyler D.
02/12/2016 12:30 -0500

Earlier today, we discussed how after 8 long years spent wandering punch drunk through a dream-like Keynesian wonderland where all financial assets rise inexorably, the world finally woke up last month with a terrible hangover only to discover that after 637 rate cuts and $12.3 trillion in asset purchases, “quantitative easing” has been a “quantitative failure.”

Perhaps it was the harrowing volatility that tipped investors off to the fact that central bankers were failing. Or perhaps it was the realization that the persistent disinflationary impulse that hangs over developed markets isn’t exactly compatible with the notion that central banks are “succeeding.” Or maybe it was the BoJ’s move into NIRP which was quickly followed by a canceled JGB auction, a soaring JPY, and crashing Japanese equities. Of course it could have been tumbling yields on the US 10Y. Take your pick, but whatever the catalyst, everyone suddenly began to talk about central banker impotence as opposed to central banker omnipotence, and at that point, the narrative was lost.

Of course it’s too late to turn back now. There’s no telling what markets would do if central banks were to suddenly admit that this has all been one giant mistake and so, the monetary powers that be stick to the script. For instance, Haruhiko Kuroda - who is known for saying things so at odds with reality that one can only laugh - said last night that “negative rates are clearly having an effect” - just as Japanese stocks were collapsing on themselves (again).

And central bankers aren’t just doubling down on the rhetoric. They’re doubling down on the easing. Earlier this week, Stefan Ingves and the Riksbank cut Sweden’s repo rate by 15 more bps to -0.50% and Mario Draghi and co. are almost sure to follow suit next month. Meanwhile, Janet Yellen admitted that NIRP has been studied for the US.

In a note out Friday, BofA takes a fresh look at what the plunge down the NIRP rabbit hole has meant for the proliferation of negative-yielding assets in Europe.

A prolonged period of USD strength (in part due to policy divergence between the Fed and the ECB) quickly took its toll on a variety of markets including, of course, commodities and EM FX. “the negative effects of this deflationary wave have been visible,” BofA’s Barnaby Martin writes, adding that “credit rating downgrades have increased [while] European high-yield spreads reached their cycle tights right before” the dollar strength began to manifest itself in earnest. “[And] not because of rising defaults, but rather because of the growth in EM-domiciled credits in the index, thus raising the market’s sensitivity to the strong Dollar/weak commodity story,” he continues.

With that as the backdrop, here’s the rest of the story which explains how NIRP initially offset the bearish themes that accompanied the strong dollar/weak commodity deflationary deep dive but ultimately left the world with a $9 trillion pile of negative-yielding debt and created a “stealth” bear market in European corporate credit.

* * *

From BofA

For a while, these bearish themes in credit were suppressed by central bank stimulus in Europe. As interest rates were cut through zero, the phenomenal growth of negative- yielding bonds exacerbated the reach for higher returns in fixed income. The numbers continue to astound: total negative-yielding Euro debt now stands at €3.5tr, encompassing many asset classes. And after Japan’s foray into negative rates at the end of January, total negative-yielding global debt now stands at close to $9tr.


Yet, we argued towards the end of last year (and to our detriment not soon enough) that the chronic lack of yield was undermining the robustness of the corporate bond market, and was in fact creating a bear market “by stealth”. The clearest sign of this, in our view, has been the constant stream of credit outflows. The peak of retail inflows into the Euro IG market was May-15. Since then, retail investors have withdrawn close to $35bn (25% of the cumulative inflow since 2010) – the largest drawdown by investors in the post-Lehman bankruptcy era. So much central bank liquidity, and yet so little inflow...

Further down the rabbit hole...

However, the fascination with NIRP policies continues after Sweden cut rates from -35bp to -50bp yesterday. Negative central bank rates now seem to be the norm rather than the exception. But amid the “race through zero”, not all currencies will weaken.

* * *

BofA's conclusion: “QE has, ironically, left the credit market in a more vulnerable position to outside shocks than at any time in the post-Lehman bankruptcy era, we think.”

Ah yes, more unintended consquences of central bankers gone Keynesian crazy. Don't expect Mario Draghi to mention this at next month's presser.

[Fenix]

US Oil Rig Count Plunges By Most In 10 Months
Submitted by Tyler D.
02/12/2016 13:08 -0500

Following last week's dramatic 31 rig decline, Baker-Hughes reports another major decline of 28 oil rigs (dropping the total oil rigs to 439 - lowest since Jan 2010 - for the 8th consecutive week). The total rig count dropped 30. On the heels of OPEC rumors overnight and then re-rumored bullshit from Venezuela, oil prices had already surged during the day and the biggest 2-week rig count decline in 10 months after initially being sold, is rallying once again.

* *U.S. OIL RIG COUNT DOWN 28 TO 439, BAKER HUGHES SAYS
* *U.S. TOTAL RIG COUNT DOWN 30 TO 541 , BAKER HUGHES SAYS

As the rig count continues to track almost perfectly the lagged oil price...

The declines were widespread with Texas dropping the most absolutely...

Oil did not rip on this "great" news... but minutes later pushed to new highs



Why Yellen's Testimony Was Not Dovish Enough: Bank CEOs Told Her The 'Economy Is Stronger Than Markets Imply'
Submitted by Tyler D.
02/12/2016 13:15 -0500

Every quarter members of the Fed meet with 12 representatives of the U.S. banking industry who comprise the Federal Advisory Council. This is what the Fed says about this specific council:

The Federal Advisory Council (FAC), which is composed of twelve representatives of the banking industry, consults with and advises the Board on all matters within the Board's jurisdiction. The council ordinarily meets four times a year, the minimum number of meetings required by the Federal Reserve Act. These meetings are always held in Washington, D.C., customarily on the first Friday of February, May, September, and December, although occasionally the meetings are set for different times to suit the convenience of either the council or the Board. Each year, each Reserve Bank chooses one person to represent its District on the FAC, and members customarily serve three one-year terms. The members elect their own officers.

Here are the 12 current "bank representative" members:

* Richard E. Holbrook, First District
* James P. Gorman, Second District
* Scott V. Fainor, Third District
* Paul G. Greig, Fourth District
* Kelly S. King, Fifth District
* O.B. Grayson Hall, Jr., Sixth District
* Frederick H. Waddell, Seventh District
* Ronald J. Kruszewski, Eight District
* Patrick J. Donovan, Ninth District
* Jonathan M. Kemper, Tenth District
* Ralph W. Babb, Jr., Eleventh District
* John G. Stumpf, Twelfth District
* Herb Taylor, Secretary

We bring this up because according to the just released records from the most recent, February 3, meeting one which came one week ahead of Yellen's congressional tesimony which on both days sent markets into a tailspin because Yellen "was not dovish enough" according to sellside commentary, she was told "the economy is stronger than the recent negative market sentiment would imply."

Specifically, this is what the Council was tasked with responding at the latest meeting:

What is the Council’s view of the current condition of, and the outlook for, loan markets and financial markets generally? Has the Council observed any notable developments since its last meeting for loans in such categories as (a) small and medium-size enterprises, (b) commercial real estate, (c) construction, (d) corporations, (e) agriculture, (f) consumers, and (g) homes? In particular, what is the likely impact of the recently issued Statement on Prudent Risk Management for Commercial Real Estate Lending on banks’ lending practices? Do Council members see economic developments in their regions that may not be apparent from the reported data or that may be early indications of trends that may not yet have become apparent in aggregated data?

And here was their main response:

The Council believes the economy is stronger than the recent negative market sentiment would imply.

Some of the other things the bank CEOs said:

* Lenders are generally still highly competitive on rates, and looser structures are becoming more common, particularly on buyout financing.
* The demand for loans is anticipated to increase moderately through 2016, consistent with a moderately expanding U.S. economy. Soft commodity pricing may reduce some demand for working capital credit.
* More stress in the energy sector and in the manufacturing sector are to be expected going forward. To date, oil and natural gas prices remain weak and show little prospect of significant increase in the near term. Ongoing low oil and natural gas prices, combined with decreasing protection from price hedges, along with tightening credit standards, will extend the current high-stress environment for many petroleum-related companies into 2016. High-level economic indicators for the manufacturing sector are also cooling down, as recent consecutive contractionary readings in the ISM manufacturing index were the lowest since the last recession. Several regional purchasing-manager surveys have also indicated contraction over the past year.
* The financial markets will be greatly influenced by the decisions of the FOMC on monetary policy, with discussion centering on the speed of the rate-increase cycle.
* Commercial real estate and construction demand is steady, with strong competition for quality credits.
* The consumer credit market remains strong, with stable-to-improved mortgage activity and increased demand from new homeowners, supported by household formation. Auto loan volumes are robust due to record auto sales and a supportive consumer sentiment.
* The strong dollar continues to weigh on commodity prices and manufacturing activity

Of the above, the bolded statment is key, which may well have solidified Yellen's rather upbeat view that the economy is strong enough to not only be able to sustain the rate hike cycle, but to neither rush in adjusting the "dot plot" lower if not horizontal for the next two years (as the market implies), but to actually proceed with another rate hike during the March meeting especially if the Atlanta Fed's Q1 upward revised forecast of Q1 GDP which just rose to 2.7%, is accurate.

The above also poses the question: who is it that decides the fate of the Fed's rate hikes - the Fed, or the 12 bankers on its advisory council.

[Fenix]

Breadth Breakdown Bodes Badly For Budding Bulls
Submitted by Tyler D.
02/12/2016 13:30 -0500

While the S&P 500 held support at January low (1,812) yesterday (and October 2014's Bullard bounce lows), BMO's Russ Visch warns "it may not hold in the days ahead" due to weak market breadth.

Given the ongoing collapse in market breadth (now breaking well below January's lows), BMO's Visch adds...

...the probabilities still favour a breakdown in the days ahead given the continued deterioration underneath the surface in broad measures of equity participation. For example, both NYSE Advance-Decline lines (traditional and common-stock-only) have broken below their January lows.

The same is true for other indexes such as the Russell 2000 and Wilshire 5000 indexes.

Daily breadth and momentum oscillators also continue to deteriorate so the path of least resistance still appears to be to the downside here.

As we have noted in recent reports, the next major support level for the S&P 500 on a close below 1812 is the February 2014 low at 1737.



What The BOJ's Final "Yentervention" Option Would Look Like
Submitted by Tyler D.
02/12/2016 14:15 -0500

Japanese stock markets have crashed 15% (the "most since Lehman") and USDJPY plunging (most since 1998) since Kuroda unleashed NIRP and are down 11% since QQE2 was unveiled to save the world from an absent Fed. So with NIRP and QE (and jawboning) now 'useless' for Japanese monetary policy, there is only one option left - Yentervention.

Suddenly it all stopped working..


As Central Banker faith falters...


Overnight saw some hints at this beginning to happen, as Bloomberg reports,

The BOJ made “rate-check” calls to some banks with implicit questions on whether they planned to buy more yen, Sassan Ghahramani, head of SGH Macro Advisors, wrote in a note Thursday. Checking rates is sometimes intended to send a signal to markets that intervention may be on the way.

Aso declined to comment Friday on whether authorities have already intervened.


Japan hadn’t bought or sold currency to sway the yen’s price since a record intervention in 2011 helped stop its advance after reaching a post-World War II record.

Japan has spent the equivalent of between $8b and $117b in the past four episodes to check undue strength in the yen. The currency gained between 2% and 9% in the three months before interventions; the yen has strengthened 9.1% in the past 90 days. The BOJ has typically come into the market around 9-11am Tokyo time.

Oct. 31-Nov. 4, 2011
Yen strengthened to an all-time high of 75.35 on the first day of intervention
Then Finance Minister Jun Azumi said on Oct. 31 he ordered intervention at 10:25am Tokyo time, saying “speculative moves” of the currency failed to reflect Japan’s fundamentals
MOF sold 9.09t yen to buy $116.3b
Yen had risen 4.5% in the three months through Sept. 30; it weakened 3.1% through the intervention and gained 0.8% through the remainder of November


Aug. 4, 2011
MOF sold 4.51t yen to buy $57.2b
Yen rose to 76.30 per dollar on Aug. 1, the strongest since a previous record
Three days later, Japan intervened; then Finance Minister Yoshihiko Noda confirmed intervention at around 10am Tokyo time, saying decisive action was needed against speculative and disorderly currency moves
Yen had climbed 5.8% in the three months through end of July; it fell 2.3% on Aug. 4 and strengthened 2.9% in the remainder of August


March 18, 2011
MOF sold 692.5b yen to buy $8.6b
Yen soared to 76.25 per dollar on March 17, what was then a record, in the aftermath of a magnitude 9 earthquake that struck Japan six days earlier
Noda confirmed that intervention was conducted at 9am Tokyo time
Other G-7 members also sold yen in joint intervention, saying the step was in response to recent movements in yen associated with tragic events in Japan, and at the request of Japanese authorities

The current surge in Yen is the largest since 1998 and suggests intervention may be overdue...

“The yen is all about risk-uncertainty, which could encourage Japanese investors to pull out of overseas assets and retreat to the safety of home,” said Jeremy Stretch, head of foreign-exchange strategy at Canadian Imperial Bank of Commerce. “Of late, it’s been a case of capital preservation rather than return. The authorities have been making plenty of noises about this unwanted strength and I see 110 as a potential line in the sand for intervention.”

The only problem is - the last 3 mini Yenterventions failed miserably to spike USDJPY...

And traders doubt The BoJ's ability...

“The stronger rhetoric and speculation about intervention or further monetary policy easing will likely create some volatility in the near term, but there’s going to be a lot of interest in selling the dollar if it goes back up against the yen,” Barclays’s Shinichiro Kadota, a foreign-exchange strategist in Tokyo, said by phone. “The market’s questioning the impact of and scope for further easing.”

Which is very clear from the size of bets on a stronger Yen...

“For intervention to turn around dollar-yen permanently, the BOJ would also need to ease domestic monetary policy further and -- more importantly -- the Fed to raise rates,” Mohi-uddin said. “Until the Fed is able or willing to raise rates further this year, dollar-yen is likely to trend lower, punctuated by any intervention Tokyo undertakes.”



Jose Canseco Says "Everyone Should Be In Gold", Predicts $1,500 By Memorial Day
Submitted by Tyler D.
02/12/2016 14:24 -0500

In the aftermath of the BOJ's stunning NIRP announcement in late January, virtually everyone had an opinion on what this move of sheer desperation means.

Actually scratch the "virtually" part: as we reported one week ago, none other than famous baseball slugger Jose Canseco opined when he tweeted that "Negative interest rates in Japan is blowing my mind", rhetorically asking "Who is advising Japan? Forcing banks to lend all ¥ will not get 2% inflation. It creates loanees market with even lower rates. Dumb move" and slamming the BOJ: "Bank of Japan should call them willie wonka bonds "YOU GET NOTHING. yOU LOSE!""

A few short days later, Jose took a firm stance on JPM's forecast that NIRP could go as low as -4.5% in Europe (as well as -3.45% in Japan and -1.3% in the US).


— Jose Canseco (@JoseCanseco) February 10, 2016

Today, this latest and perhaps most popular entrant to financial twitter took on a topic that is even more sensitive, and divisive, to the financial arena: gold.

This is what he tweeted moments ago:

not a surprise but everyone should be in gold

— Jose Canseco (@JoseCanseco) February 12, 2016

$1500+ by Memorial dAY

— Jose Canseco (@JoseCanseco) February 12, 2016

Mock him? Sure go ahead, but with an opinion validated by such commentary...

With gold minus storage cost becoming greater than cash returns could be a long rally. what else is there, bitcoins? think about it

— Jose Canseco (@JoseCanseco) February 12, 2016

... it is clear that the famous baseball slugger has done far more homework than 90% of the anti-gold crowd.

His conclusion is one we, and incidentally JPM's head quant Marko Kolanovic, wholeheartedly with:

Plus Psychology For Gold index growing with euro bank mess, nirP, falling oil, tanking stock markets, yellens slowdown hints.

— Jose Canseco (@JoseCanseco) February 12, 2016

Will Jose be right? And can this sport celebrity stir up "animal spirits" among the population and force a rush into physical gold ahead of NIRP's arrival in the US?

We'll find out, but for now, this is what Jose being right would look like.