Junk Energy: Too Rich For My Tastes

Two weeks ago, we issued a “Friday chart challenge” in which we showed you the following graphic: The point, of course, was to demonstrate that the market is pricing in less relative default risk for HY energy than at any other time since late 2014. That of course is absurd given the global deflationary supply…

Now Everyone’s Calling A Top

Ok, so let’s get to a couple of things you might have heard making the rounds on Monday. For one thing, Goldman said sell some stocks last night. The bank has “tactically” downgraded equities on a 3-month time horizon. We’d love to know what an “un”-tactical downgrade looks like. It’s the same old story, but…

Weary, Wary Investors Cast Suspicious Eye At … Everything

Over the weekend, we characterized markets as “despondent.” Some of that’s probably seasonal but you get the increasingly palpable sense that everyone is just waiting around on something to snap. We kind of bump along from data point to data point with nothing really making a dent in terms of risk assets, a fact which…

“Wishy, Washy” Kuroda Fails To Deliver: Are We Near The End?

Remember what we said two days ago about "expectations?" They can be dangerous things. Going into Friday's BoJ decision, expectations were in fact running so high it wasn't even clear what they were. ”If the BOJ doesn’t move this time, there’s a possibility that the yen will strengthen further," Hiroaki Muto, chief economist at Tokai…

“Japanification”: A New Interpretation

Ok, we’re just going to level with you here because there’s really no way to spin this: that was all kinds of silly. If someone showed you this chart… ...and then subsequently asked you whether you thought the Fed statement was dovish or hawkish what would you say? Well, you’d probably say “dovish,” right? You’ve…

Fed Post-Mortem: A Whole Bunch Of Nothing

“Capitalism can’t exist at these levels.” That’s the take from (former) bond kind Bill Gross following Wednesday’s farce of a Fed “decision.” The idea that this was a “live” meeting was of course a joke, strong June jobs print or no strong June jobs print. As we put it in a column published elsewhere, if…

Black Swan Walking

Watching the Democratic National Convention has turned out to be even more surreal than watching the GOP convention. What’s amusing is that the Democrats seemingly learned very little from the Republican primary race. Apparently, it still hasn’t occurred to anyone that you can’t call someone evil and dumb at the same time. If you’re dumb,…

Expectations Can Be A Dangerous Thing

Sometimes there’s nothing worse than “expectations.” Allow us to give you a poignant example. This is from BNP on Monday (summarized by Bloomberg): “BNP Paribas favors holding long XAU/JPY and USD/JPY positions via options heading into Friday’s BOJ meeting as the bank’s economists expect a 20bp IOER cut. Trade recommendation based on BNP analysis suggesting…

Common Sense Isn’t So Common These Days

Whenever you notice people have stopped applying common sense to their investment decisions, it might be a good time to go looking for an exit. Here’s something you might not have noticed today: So that’s Santander Consumer and it’s down sharply after announcing it would delay reporting Q2 results due to ongoing discussions with accountants.…

Post-Pokemon Panic, “Crude” Realities Weigh On Sentiment As Central Banks Eyed

“Monday, Monday, can’t trust that day.” Global markets are off to a shaky start in a week that includes a Fed meeting, a BoJ meeting, and some key economic data out of the US. As Deutsche Bank’s Joseph LaVorgna writes in a note from the future (note the highlighted commentary in the image below), “Friday's…