Archive for the ‘Uncategorized’ Category
GM to invest $1 billion in U.S. plants
Under pressure from Trump, GM plans to invest $1 billion in U.S. plants, add or retain 1,000 jobs. …read more
Source: GM to invest $1 billion in U.S. plants
Bank owned by Mnuchin accused of discrimination
Advocacy groups claim that OneWest, once run by Steve Mnuchin, deliberately avoided making loans to African Americans, Asian Americans and Latinos. …read more
Source: Bank owned by Mnuchin accused of discrimination
Corona has a Trump-Mexico problem
Shares of Corona distributor Constellation Brands have dropped 10% since the election due to concerns about how Trump’s tax and immigration policies will impact the beer company. …read more
Source: Corona has a Trump-Mexico problem
Just How Crowded Is The "Long Dollar" Trade? The Answer In One Chart
By Tyler Durden
Until last night’s Trump statement that the US dollar is overvalued, it was smooth sailing for Wall Street’s momentum chasers, who happily piled into what until recently was Wall Street’s most crowded trade. How crowded?
For the latest answer, we go to the latest just released monthly Fund Managers Survey conducted by BofA’s Michael Hartnett who shows that according to Wall Streeters themselves, the dollar is the most crowded trade by orders of magnitude. In fact, in January the number of respondents who said the “Long USD” is the most crowded trade has risen from 35% in December to a whopping 47%, the highest response rate in the last few years of the survey. Far behind, in second and third place, are “short government bonds” and “long high quality/minimum vol” both at 11%.
What makes this observation paradoxical is how reflexive it is, because in the same report BofA writes that contrarians note “long US dollar seen as most crowded trade by a country mile”, and adds that the percentage of investors who think USD is overvalued is the highest in over a decade, or since Nov’06 (net 22%).
Still, they refuse to sell… until now. Because now that the president-elect has publicly taken the other side of the trade, we urge readers to take a second look at RCB’s warning that the “Pain Trade”, i.e. the inversion of Long-USD positions, has begun.
Source: Just How Crowded Is The "Long Dollar" Trade? The Answer In One Chart
SF doctor’s office powered by sensors, AI
A new doctor’s office from Silicon Valley execs aims to change healthcare. …read more
Source: SF doctor’s office powered by sensors, AI
RBC: "Commence Pain Trade"
By Tyler Durden
Having warned last week that the market is close to a violent unwind of the Trumpflation momentum trade, today RCB’s head of cross-asset strat, Charlie McElliggott, takes a victory lap following Trump’s overnight comments that the dollar is “too strong”, while slamming the Border-Adjustment Tax – a key catalyst for a dollar stronger as much as 15% in the future – and warned that the start of the “pain trade” has arrived.
The full note from RBC’s Charlie McElligott
TRUMP DUMPS BORDER-ADJUSTED TAX, “LONG DOLLAR” TRADES UNDER PRESSURE
Commence “pain trade.”
Let us begin today by taking it back to last Wednesday’s now-prophetic “RBC Big Picture” note:
“Fundamentally with the USD bull-case, this is a large part of why there is SO much focus on key items like the border-adjusted tax element of the Trump policy push. A large part of the Dollar’s strength (beyond ‘just’ the data) post- the election has been based upon this, where if the corporate tax rate were cut to say 20%, the Dollar would by economic theory have to then appreciate 20% (and of course too, an additional ‘tax factor’ driving the USD bull-thesis is that a meaningful chunk of $2.5T of profits held overseas by US corporates would be repatriated following a ‘business friendly’ incentive package / one-time cut to the repatriation tax to say 8-10%).
There is a view though within some verticals of the business community is that the border-adjusted system represents a very significant risk (consumer retail most notably) to their businesses / the broad economy as imports become more expensive and will create trade distortions (while the CBO itself says that the border-adjusted system would NOT reduce the trade deficit, which is a driver of its political popularity). There is so much discourse on this issue currently on this topic within the C-suite in fact some in policy circles are now saying they believe it appears increasingly likely that the ‘full’ border tax adjustment (currently in the Houses’ version of the bill) ends up being watered down to a sort of “relocation penalty” (which would likely then appear in the Senate-version of the bill).
Again, this is all a hypothetical, but if some of this ‘sense’ around said USD ‘bull driver’ turning potentially bearish was to ‘leak’ into the market, it would take some of the air out of the “long USD” trade–and that is where things could go off the rails. If the Dollar broke lower, its likely too that bonds and duration would rally; defensives (staples, utes, reits) and growth (tech / biotech / discret) squeeze against crowded value unwinding (fins, energy, indus); yen and euro would squeeze mightily; gold squeezes while copper pukes in a favorite commodities ‘pair’ unwind; HY could reverse weaker vs IG (currently everybody long CCC vs BB on the high beta trade)…this would be the theoretical path to our next pain-trade or even VaR shock.”
…AND SCENE.
Overnight, we see that Donald Trump has indeed talked-down the …read more
Source: RBC: "Commence Pain Trade"
Watch Live: Theresa May’s Brexit Speech; Says Both Houses Of Parliament Will Vote On Final Deal
By Tyler Durden
Having been extensively leaked overnight so as to prevent “market surprises”, Theresa May has just begun her speech calling for a “clean Brexit” from the EU. Watch it live below.
Here are the highlights:
- MAY: WE WILL NOT SEEK PARTIAL OR ASSOCIATE MEMBERSHIP OF EU
- MAY: UK LEAVING EU, I WILL SEEK BEST DEAL FOR UK
- MAY: GOVERNMENT WILL PUT THE FINAL BREXIT DEAL TO A VOTE IN BOTH HOUSES OF PARLIAMENT
- MAY: DO NOT SEEK TO ADOPT MODEL ALREADY USED BY OTHER COUNTRIES
- MAY: WILL REMAIN WILLING PARTNERS, ALLIES TRADING PARTNERS
- MAY: DECISION TO LEAVE EU WAS NOT AN ATTEMPT TO HARM EU OR ITS MEMBER STATES
- MAY: VOTE NO LEAVE NO REJECTION OF SHARED VALUES
- MAY: OVERWHELMINGLY IN UK INTEREST THAT EU SUCCEEDS
- MAY: JUNE 23 A MOMENT WE CHOSE TO BUILD ‘TRULY GLOBAL BRITAIN’
- MAY: EUROPEANS WILL STILL BE WELCOME IN BRITAIN AND HOPE BRITONS WILL BE WELCOME IN EU NATIONS
- MAY: PRESERVATION OF UK UNION AT HEART OF PLANS
And in an unexpected twist, May also said that she will put the final Brexit deal to a vote in both houses of parliament:
- MAY: WILL PUT THE FINAL BREXIT DEAL TO A VOTE IN BOTH HOUSES OF PARLIAMENT
Cable is soaring on the news, as suddenly there is a possibiliy Brexit may not happen at all.
Source: Watch Live: Theresa May’s Brexit Speech; Says Both Houses Of Parliament Will Vote On Final Deal
Chinese President: No one can win a trade war
Xi Jinping has mounted a robust defense of free trade and global investment at the World Economic Forum in Davos. …read more
Source: Chinese President: No one can win a trade war
Rolls-Royce will pay $813M to settle bribery charges
The British engineering giant faces allegations of bribery in the U.S., U.K. and Brazil. …read more
Source: Rolls-Royce will pay $813M to settle bribery charges
