By Tyler Durden
The G-7 “committee to think and talk about saving the world but which will actually end up doing nothing at all” meet in Sendai this weekend. Can you spot the odd one out?
While Merkel chose not to wave… or smile; it is Jean-Claude Juncker that appears to be having trouble with his salute…
Source: Caption Contest: Spot The Odd G-7 Leader Out
By Tyler Durden
Waiting For Yellen…
Let's start today with what didn't go up…
USDJPY – once 110.000 stops had been run – decoupled lower from stocks…
Oil – once it tagged $50 – decoupled lower from stocks…
High yields bonds decoupled from stocks…
Treasury yields decoupled lower from stocks…
So where does that leave us for the week…
Well stocks love it!!
Although momo started to fade today… once again pivoiting around EU close with a weak US close…
As volume collapsed even more…
And VIX was pushed to 13.55 lows… but was unable to sustain stocks…
AAPL extended its winning streak to 5 days – topping $100 and breaking above its 100DMA (good old buybacks!!)
Bond rallied too – after the 7Y auction today…
The Dollar Index fell for the 2nd day in a row – note that Cable fell today as Brexit concerns reappeared…
Despite the drop in the dollar, commodities slipped lower today (with crude underperforming) but the week has one clear pattern – buy growthy commods, sell PMs…
WTI Crude tagged $50 today – the highest for the July contract since early November 2015… and then sold off…
Charts: Bloomberg
Source: Decouple-apalooza – Bonds, Yen, Oil, Dollar Diverge From Volumeless Stock Levitation
The level of optimistic mom and pop investors has declined to the lowest level in more than a decade, according to a new survey released on Thursday.
…read more
Source: The most unloved stock market since 2005
By Tyler Durden
Cable has strengthened notably in the last week or so as Cameron and Osborne unleashed phase 2 of “project fear” and 'some' Brexit polls suggested market fears of a 'leave' decision were overblown. However, the broad polls still show the decision is too close to call, which is why the news from Ladbrokes – Britain's largest bookmaker – that they have seen a sudden surge in Brexit bets in the last few days. Interestingly, sterling has started to leak lower today…
As WSJ reports, some analysts point out that political polls and betting have called British political events incorrectly before, and that sentiment in referendums can swing in the closing days of campaigning.
“In the early months of this year, there was a big selloff in Brexit-related stocks,“ said James Ross, who manages Henderson Global Investors’ U.K. Alpha Fund.
”But since around the turn of this month we’ve seen a rapid reversal, and complacency has reached a bit of a dangerous level.”
A few cherry-picked headline polls and Cable has surged 4 handles as confidence that Brexit will not happen lifts…
But while that has become the narrative for the mainstream, professionals have been hedging Sterling volatility at a record level…
As Bloomberg reports, investors are now paying a record premium to hedge against the pound’s fluctuations over the next month as risks surrounding the U.K. referendum on European Union membership persist. Sterling’s one-month implied volatility versus the dollar has surged to 7.83 percentage points relative to historical swings, from 2.56 yesterday.
Which is odd because the aggregate polls now have Brexit a higher probability than Bremain…
And as far as people putting their money where their mouth is – Ladbrokes not a huge increase in th eproportion of money being bet on Brexit…
While we assume The Fed will be carefully watching the polls – desperate for another excuse to hold for one more month – we suspect the surge in cable of the last week was more squeeze than faith in Bremain, and as Automatic Earth's Raul Ilargi Meijer notes, the Euro is just 15 years old, but the EU goes back many decades. Strategic positions have long been taken in trenches that have long been dug. Is that the fight you want to fight? There’ll always be a Europe, but there’s nothing inevitable or incontrovertible about the EU, or about Brussels being its capital. All it takes is perhaps for one country to say “Thanks, but no, thanks.” The EU for all its bluster is very vulnerable.
So there’s your voting options. But it should be clear that the Brexit vote is headlined by the wrong people, for all the wrong reasons, and with all the wrong arguments. It can’t be exclusively about money, but it is. And if the Unholy Union falls apart sometime further down the line regardless, a vote for Remain on purely financial grounds will take on a whole …read more
Source: Brexit Bets Surge At Bookies Despite Cable Strength
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The overwhelming majority of young, wealthy millennials believe that impact investing is important to their decisions, according to a new survey. …read more
Source: How young millionaires invest their money
Moody’s Analytics has correctly predicted the winner of every presidential race since 1980. The model says Hillary Clinton or Bernie Sanders will triumph in 2016. …read more
Source: Clinton predicted to beat Trump…due to economics
Oil prices have just passed a key milestone on their long journey out of the doldrums, hitting $50 for the first time in 2016. …read more
Source: Oil prices break $50 barrier
By Tyler Durden
On the heels of the 17-sigma beat in new home sales, pending home sales soared 5.1% MoM in April – 6.5 standard deviations above economist estimates of a 0.7% jump. Pending home sales rose for the third consecutive month in April and reached their highest level in over a decade, according to the National Association of Realtors. All major regions saw gains in contract activity last month (with The West surging 11.5% MoM) except for the Midwest, which saw a meager decline.
Best month since 2010…
Which no one saw coming…. Some context for the “beat”…
Lawrence Yun, NAR chief economist, says vast gains in the South and West propelled pending sales in April to their highest level since February 2006 (117.4).
“The ability to sign a contract on a home is slightly exceeding expectations this spring even with the affordability stresses and inventory squeezes affecting buyers in a number of markets,” he said. “The building momentum from the over 14 million jobs created since 2010 and the prospect of facing higher rents and mortgage rates down the road appear to be bringing more interested buyers into the market.”
Yun expects sales this year to climb above earlier estimates and be around 5.41 million, a 3.0 percent boost from 2015. After accelerating to 6.8 percent a year ago, national median existing-home price growth is forecast to slightly moderate to between 4 and 5 percent.
Charts: Bloomberg
Source: Pending Home Sales Soar Most Since 2010, Beats By 6 Standard Deviations
The markets are tracking the same pattern that played out in 2015.
Most market action (more than 80%) today is driven by computer algorithms. These programs look for an asset class that is moving, and then buy based on the momentum.
From March through May, the moving asset class is Oil, which historically tends to rally during this period. In 2015, Oil bottomed in March and rallied hard into June.
This year, the same pattern played out. However, the pattern hit a month early as traders and computers tried to front-run each other. Oil bottomed in February and has risen to $50 per barrel.
Anyone who is buying into this rally in the belief that it represents the start of a new bull market needs to consider what happened in 2015 when the seasonal trend ended: Oil crashed, pulling stock down with it.
We firmly believe the markets are prepring for another Crash. Only unlike the one that hit in August 2015, this one will see stocks dropping over 20%.
On that note, we are already preparing our clients for this with a 21-page investment report titled Stock Market Crash Survival Guide.
In it, we outline precisely how the crash will unfold as well as which investments will perform best during a stock market crash.
We are giving away just 1,000 copies for FREE to the public.
To pick up yours, swing by:
https://www.phoenixcapitalmarketing.com/stockmarketcrash.html
Best Regards
Graham Summers
Chief Market Strategist
Phoenix Capital Research
Source: Smart Traders Who Realize This Pattern Could Make a Killing
By Tyler Durden
Recently we presented a profile of the latest scourge to haunt Africa’s former oil producing powerhouse Nigeria, namely the Niger Delta Avengers, who not only maintained a regularly updated blog following the February launch of their Godaddy-hosted website which even includes a Contact Us section…
… but are perhaps the most social media savvy “freedom fighting” organization in the world today, with a twitter account that constantly updated on the group’s ongoing activities. In fact, just yesterday the NDA may have been the first such group to pre-announce a terrorist act before any of the major media outlets caught it.
We Warned #Chevron but they didn’t Listen. @NDAvengers just blow up the Escravos tank farm Main Electricity Feed PipeLine.
— Niger Delta Avengers (@NDAvengers) May 25, 2016
It wasn’t a joke.
As Reuters reported this morning, Chevron’s onshore activities in Nigeria’s Niger Delta have been shut down by a militant attack at its Escravos terminal, the company confirmed on Thursday.
As Reuters observes, the Niger Delta Avengers, which has told oil firms to leave the Delta before the end of May, said late on Wednesday it had blown up the facility’s mains electricity feed.
“It is a crude line which means all activities in Chevron are grounded,” the source told Reuters, without elaborating. There was no immediate official confirmation from Chevron.
Zebo Austin, who lives nearby, told Reuters: “We heard a loud blast at the Abiteye to Escravos crude pipeline which was blown up last night by yet-to-be identified militant group.”
The Avengers and other militants, who say they are fighting for a greater share of oil profits, an end to pollution and independence for the region, have intensified attacks in recent months, pushing oil output to its lowest in more than 20 years and compounding the problems faced by Africa’s largest economy.
Abuja has responded by moving in army reinforcements but British Foreign Minister Philip Hammond said this month President Muhammadu Buhari needed to deal with the root causes of the conflict.
Crude oil sales from the Delta account for 70 percent of national income but residents in the area, some of whom sympathize with the militants, have long complained of poverty. Buhari has extended an amnesty deal signed with militants in 2009 that stepped up funding for the region. But he has cut funding for the amnesty program and canceled contracts with former militants to protect the pipelines they used to attack.
Perhaps as a result of this tweeted attack, the oil grind higher continues this morning pushing both benchmark contracts above $50, since this latest attack means even more Nigerian oil output will be halted temporarily until the government finally manages to rein in this still mysterious organization with unknown funding.
Source: Chevron Facility Goes Offline In Nigeria Following Tweeted Attack By Mysterious Militant Group
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