“Inside weeks happening several weeks in a row is almost unheard of,” Miller Tabak equity strategist Matt Maley commented Monday on CNBC’s “Trading Nation,” calling it a sign that investors “don’t know what’s going to happen next — they don’t know what to do with their money.”
What we find in 2016 is only more evidence for this stunted “V.” This is the true context for “mixed” retail sales. At each of these downturns or slowdowns or shocks, the economy gets weaker and slower without ever recovering from it as it would under normal circumstances; as it had in all periods prior to the housing collapse – the eurodollar peak. We find instead this ratchet effect where after each episode the economy is worse off for having been forced into it; this is cannot be some usual business cycle mechanism.
After what clearly seems like a coordinated, multi-day attack by the mainstream media on the Trump campaign, culminating with the most recent New York Times article alleging sexual assault, the campaign has officially opened up new fronts in its war on the Washington establishment. After attacking members of his own party, mostly Paul Ryan, earlier in the week for withdrawing their support, Trump has now directed his wrath towards the FBI and DOJ calling for an “investigation into the investigation” conducted by the FBI of Hillary’s private server.
The stock market has held up quite well this year in the face of numerous developments that are usually regarded as negative (from declining earnings, to the Brexit, to a US presidential election that leaves a lot to be desired, to put it mildly). Of course, the market is never driven by the news – it is exactly the other way around. It is the market that actually writes the news. It may finally be time for a spanking though.
Financial advisers and market strategists usually warn their clients that the market’s performance in the past is not a reliable guide for its future moves. But when Citi’s Tom Fitzpatrick and his team overlaid the current chart of the benchmark S&P 500 with the index in 1987 — right before the crash — they got “the chills.”
A few weeks ago, our most reliable measures of market internals shifted to a uniformly unfavorable condition, reversing a few trend-following components that had held us to a fairly neutral near-term outlook for several months. This deterioration was indicative of a shift away from the somewhat mixed investor attitude toward risk that we’ve seen since March, and toward increasing risk-aversion; particularly an unwillingness to extend speculative yield-seeking in the face of already extreme valuations across multiple asset classes.
One measure of expected turbulence, the relative cost of options that pay when stocks decline versus those that appreciate when they rise, jumped to the highest level ever recorded just before the S&P 500 Index buckled on Tuesday. Call it the new normal for investors conditioned to expect the worst when it comes to politics, the economy and corporate earnings.
In the not-too-distant future, our low commodity price problem is likely to become a low asset price problem. Once this happens, we will have a huge debt default problem. It will also become harder to obtain new loans, because defaults on existing loans will have an adverse impact on the ability of banks to make new loans. Interest rates required by bond markets are likely to spike as well.
If Raddatz had posed her question with the more complex reality (rather than the simplistic, biased form that she chose) and if Clinton still responded with her recipe of a “no-fly zone,” the obvious follow-up would be: “Wouldn’t such a military intervention constitute aggressive war against Syria in violation of the United Nations Charter and the Nuremberg principles?
De facto, from the Russian view, that deal was sabotaged on Sept. 17 by the Pentagon when U.S. and coalition aircraft bombed a Syrian government military outpost at Deir Ezzor killing more than 60 Syrian soldiers. And de facto, the Russians had suspended the implementation of the ceasefire on Sept. 23 when they renewed heavy bombing of east Aleppo in close collaboration with the Syrian air force and ground units. Now that the U.S. had formalized the end of cooperation over Syria, Russia set out its own full-blooded response which it called a “radical change in relations” between the two countries.