Even though many feared a stock market crash, the surprise election of Donald Trump has helped carry the Dow more than 1,000 points higher since Election Day. …read more
Source: Dow zooms over 1,200 points since Trump victory
Peter Thiel is starting to make his mark on Trump transition team. …read more
Source: Peter Thiel adds allies to Trump transition
By Tyler Durden
Having dropped out of the primary race almost exactly a year ago, prominent foreign policy hawk, Republic Senator Lindsey Graham told CNN during an interview today that he plans to launch two separate probes (from both of his subcommittees) into Russia’s “hacking” and demand that President-elect Trump “take a much tougher tone towards Russia… or they will break up our alliances.”
In intvw, GRAHAM announces plans for two new investigations into Russia hack, calls on Trump to toughen tone. Graham is the first Republican to call for an investigation into Russia after constant demands from the Democrats, and noted that he and John McCain support further sanctions on Putin.https://t.co/ZwnSKcxd5h
— Manu Raju (@mkraju) December 7, 2016
Source: Lindsey Graham Launches 2 Russian ‘Hacking’ Probes, Demands Trump "Toughen Tone"
By Tyler Durden
Confused by the relentless surge in stocks, which appear to have collectively decided to have no more down days as they ramp higher day after day as VIX crashes, and may soon see single digits? Here is one theory courtesy of RBC’s head of cross-asset strat, Charlie McElligott.
DATA AND TRUMP KICKING-UP ‘ANIMAL SPIRITS,’ AGAINST SIGNS OF Y.E. GROSS-DOWNS
The pause in the rates trajectory continues to be extraordinarily ‘tame,’ as many have been anticipating a sharper ‘counter-trend rally’ which has yet to occur. One thought here is the ongoing situation with Chinese outflows, with data overnight showing their FX reserves dropping the most in 10 months…as such we see the Yuan at 8 year lows against the Dollar. The rhetoric and twitter-barbs from Trump regarding the potential to paint China as a currency manipulator, along with the Taiwan phone-call faux paus, continue to agitate the situation.
It is certainly reasonable to believe that this source of UST selling will continue to keep USTS rallies ‘limp,’ and still in front of a very pro-growth / reflationary Trump policy mix to come: lower corporate and individual taxes, industry deregulation, trade policy (tariffs will drive up domestic prices as cheaper international goods competition is removed) and a fiscal policy shift away from monetary policy will all conspire to take rates higher in the year + window ahead.
COMMENTARY: I’ll keep this simple…we continue to see obvious re-risking in the form of “buy everything” price-action, as investors push further out onto the risk curve against a shift away from the 5+ year narrative of “secular stagnation” towards positioning that allows capture of “reflation animal spirits.”
Add-in the market ‘comfort’ of knowing that both the BoJ (Iwata reiterating that they can accelerate / expand purchases overnight) and the ECB (extension expectations tomorrow) will continue providing a QE-monetary policy “backstop” to keep the grind higher in rates from getting ‘disorderly’ in the medium-term. This is critical to avoiding ‘VaR shocks,’ as well as avoiding a drag to the broad economy through ‘financial tightening.’
More of the same “price is news” on reflation positioning-pivot—a look at market metrics:
–USD 5Y5Y inflation swaps making 2-year highs last week and holding
–UST 5Y Zero coupon inflation yields at 26-month highs last week and holding
–UST 30Y Breakeven yields at 26-month highs last week and holding
–WTI Crude 17-month highs this week and holding
–XLF/XLU ratio at 8-year highs
–Global Cyclicals to Defensives index ratio at 2-year highs
–IWM/TLT ratio at 3-year highs
–U.S. Growth / Value ETF ratio at 2.5-year lows
And to the macro data-points (note: much of this is expressed in the charts section below):
–G10 Economic Surprise Index at 3-year highs
–US Consumer Confidence printing at 9-year highs
–CEO Confidence Index 3rd highest print since July 2007
–Global Manufacturing PMI’s at 27-month highs
–Global Services PMI’s at 1-year highs
–49-month highs in G10 Inflation Surprise Index
As such, we are seeing ‘real money’ client portfolio rotation stay ‘front-footed’ on adding …read more
Source: What’s Behind The Relentless Market Surge? RBC Explains
Much of the $50 billion Donald Trump said is headed to America is likely to come from Saudi Arabia. …read more
Source: The billions behind Trump’s tech deal is from Saudi Arabia
Time magazine has named President-elect Donald Trump its Person of the Year, calling him “President of the Divided States of America.” …read more
Source: Trump named Time Person of the Year
By Tyler Durden
One year after narrowly losing to Angela Merkel (and tied with ISIS leader Abu Bakr al-Baghdadi), Donald Trump has finally won the 2016 Time “Person of the Year Award”, the person – or idea – who according to the magazine has most influenced the news and the world in the past year, for good or ill.
Trump beat out 10 other finalists, including his Democratic rival, Hillary Clinton. TIME declared Clinton their runner-up.
This will be Trump’s 10th time on the magazine’s cover, and all but one have been since August 2015. His first appearance on TIME was in 1989.
The magazine has made the designation every year since 1927, when aviator Charles Lindbergh was chosen as the first Man of the Year. The title was amended to Person of the Year in 1999. Over its history, TIME has bestowed the title to many presidents, political leaders and industry trailblazers who often view the designation as an honor. However, the magazine also has selected notorious recipients in the past, including Adolf Hitler in 1938, Joseph Stalin in 1939 and 1942, and Iran’s Ayatollah Khomeini in 1979, because of the impact they had on the world at the time.
As Time explains, “this is the 90th time we have named the person who had the greatest influence, for better or worse, on the events of the year. So which is it this year: Better or worse? The challenge for Donald Trump is how profoundly the country disagrees about the answer.” Trump’s response per an interview on the NBC “Today” show aired moments ago: “It’s a great honor, it means a lot.“
A brief video lays out the reasoning behind the choice:
Here is the full Time’s logic:
It’s hard to measure the scale of his disruption. This real estate baron and casino owner turned reality-TV star and provocateur—never a day spent in public office, never a debt owed to any interest besides his own—now surveys the smoking ruin of a vast political edifice that once housed parties, pundits, donors, pollsters, all those who did not see him coming or take him seriously. Out of this reckoning, Trump is poised to preside, for better or worse.
For those who believe this is all for the better, Trump’s victory represents a long-overdue rebuke to an entrenched and arrogant governing class; for those who see it as for the worse, the destruction extends to cherished norms of civility and discourse, a politics poisoned by vile streams of racism, sexism, nativism. To his believers, he delivers change—broad, deep, historic change, not modest measures doled out in Dixie cups; to his detractors, he inspires fear both for what he may do and what may be done in his name.
The revolution he stirred feels fully American, with its echoes of populists past, of Andrew Jackson and Huey Long and, at its most sinister, Joe McCarthy and Charles Coughlin. Trump’s assault on truth and logic, far from hurting him, made him stronger. His appeal—part hope, part snarl—dissolved …read more
Source: Donald Trump Is Time Magazine’s 2016 "Person Of The Year"
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By Tyler Durden
With global bank stocks soaring on expectations – and hope – that financial sector regulation will be broadly swept away under Trump, today Europe did its best to show that, at least for now, the banks are not in the clear when the European Commission has fined JPMorgan, Credit Agricole and HSBC a total of €485 million ($521 million) for rigging the Euribor benchmark as European Union antitrust regulators wrapped up a five-year investigation into the scandal.
The three banks colluded on euro interest rate derivative pricing elements, and exchanged sensitive information, in breach of EU antitrust rules, the European Commission said on Wednesday in an e-mailed statement. JPMorgan was fined 337.2 million euros, HSBC got a 33.6 million-euro penalty and Credit Agricole must pay 114.7 million euros. Margrethe Vestager, the EU’s competition policy chief, said banks “have to respect EU competition rules just like any other company operating in the single market.”
Fine of €485 million to 3 banks – Credit Agricole, HSBC, JPMorgan Chase – for participating in cartel of euro interest rate derivatives.
— Margrethe Vestager (@vestager) December 7, 2016
“The aim of the cartel was to distort” Euribor, Ms Vestager said. The traders involved “tried to submit quotes to move the Euribor rate up or down”. The Commission found evidence in records from online messaging services of traders “congratulating each other on work well done,” she said adding that “The enforcement of competition rules brought to light widespread collusion between banks.”
The fines mark the final stage in what began as a far wider investigation into a cartel of banks that manipulated interest rate derivatives linked to the Euribor benchmark rate. Four other banks reached a settlement with the Commission concerning the same cartel back in 2013.
As Bloomberg reports, the EU’s investigation into Euribor manipulation was strained three years ago after Credit Agricole, JPMorgan and HSBC refused to join a multi-bank settlement with four other lenders including Deutsche Bank AG and Societe Generale SA. Since then, the holdouts have been a thorn in the commission’s side, successfully delaying the process and showing up the regulator for its handling of the case. The three lenders were handed a statement of objections in May 2014 accusing them of colluding to rig Euribor rates in the wake of a global scandal embroiling some of the world’s biggest banks. By refusing to settle the case with the commission they forfeited the chance of a 10 percent discount on any fines.
Slap on the wrist-sized fine notiwthstanding, the banks remained defiant. JPMorgan “did not engage in any wrongdoing with respect to the Euribor benchmark,” Jennifer Zuccarelli, a spokeswoman for the bank in London, said in the statement. “We will continue to vigorously defend our position against these allegations, including through possible appeals to the European courts.”
Credit Agricole in a statement said it “firmly believes that it did not infringe competition law” and that “it will appeal the commission’s decision.” The fine payment “will not affect the 2016 financial statements given the …read more
Source: JPMorgan, HSBC, Credit Agricole "Bank Cartel" Fined $521 Million For Euribor Rigging
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