Bank of America: “The Best Reason To Be Bearish Is…There Is No Reason To Be Bearish”

Back in mid-July, Bank of America chief investment strategist Michael Hartnett wrote “The Most Dangerous Moment For Markets Will Come In 3 Or 4 Months” in which he warned that “further upside in risk assets will create problems later in the year” and concluded that “ultimately, we believe the extremely strong performance by equities and bonds in H1 is very unlikely to be repeated in H2” because “”monetary policy will have to tighten to raise volatility, reduce Wall St inflation, and reduce inequality. There are two ways to cure inequality: you can make the poor richer, or you can make the rich poorer. The Fed will reduce its balance sheet in the hope of making Wall St poorer.”

Or maybe not, because almost three months later, the same Hartnett today writes that the “best reason to be bearish is…there is no reason to be bearish.” and admits that the “Icarus ‘long risk’ trade extended into autumn (Humpty-Dumpty “great fall” postponed a tad longer) by low inflation, big liquidity ($2.0tn central bank buying), high EPS, and promise of US tax reform”, noting that the “monster rally in credit and equity markets began 18 months ago when best reason to be bullish was there was no reason to be bullish.”

And with the VIX approaching all time lows as the S&P hits another daily high, the BofA strategist reiterates that his “Icarus Rally” price targets for Q4 remains 2630 in the S&P, 6666 on the Nasdaq, and the 10-year Treasury hitting 2.85%, as the rising dollar pushed the EURUSD down to 1.15. So what will prompt Q4 peak in the market? According to the BofA strategist, the catalyst will be a “Q4 “top” driven by tax reform, i.e. “peak Policy, a rise in MOVE index, and a peak RMB.

As Hartnett details further, here are the three catalysts that could end the current period of record complacency.

  • Tax reform = “peak policy” = buy rumor, sell fact…but too early to sell fact; tax reform = quicker Fed balance sheet reduction and less share buybacks if capex accelerates (since 2009 lows S&P equity market cap up $15.3tn, Fed’s balance sheet up $4.5tn, share buybacks up $3.5tn)
  • Big jump in the MOVE index of US Treasury market volatility (i.e. “bond shock”) catalyst for cross-asset vol, but requires inflation to rise
  • China financial conditions have tightened & EM “carry-trade” unwind another source of cross-asset vol (Chart 3)…Chinese policy panic kickstarted this 18-month rally, and consensus now much more complacent on China

The question then is how long after said top drags the market lower before the Fed casually hint that QE4 may be just around the corner to keep the wealth effect alive in perpetuity.

Here are some other observations from Hartnett on the latest weekly fund flows:

  • Risk-off week of flows: $8.8bn into bonds, $2.2bn outflows from equities, $0.3bn into gold
  • Q3 rotation from US to rest of world: week of $7.5bn US equity outflows biggest in 14 weeks; $23bn US equity outflows in Q3 vs $41bn inflows to rest of world, continuing clear flow divergence YTD (Chart 1)
  • Q3 “yield-on” continues in fixed income: inflows to HY bonds (biggest in 10 weeks) & EM debt vs Treasury outflows reflects ongoing lust for yield; $68bn IG bond inflows in Q3 dominated all fixed income flows and IG continues to be the big “yield winner”
  • Stocks star in 2017: YTD annualized returns…stocks 24%, bonds 7%, commodities -2%, US dollar -11%
  • Our Q4 targets: S&P 2630, Nasdaq 6666, 10-year Treasury 2.85%, EUR 1.15
  • Our Q4 AA: long stocks, commodities, volatility, US$, short bonds; more bearish AA expected in 2018
  • Our Q4 trades: long US$ vs EM FX, long oil, long barbell of uber-growth (IBOTZ, DJECOM) & uber-value (BKX) = Icarus trade; further unwind of extended “long disruptor, short disrupted” trade likely (i.e. death of old Retail, Media, Autos, Advertising by Tech Disruptors – Chart 2); rotational outperformance of oil>credit, EAFE>EM, value/growth
  • And monster rally in credit and equity markets began 18 months ago when best reason to be bullish was there was no reason to be bullish
  • Returns since Feb’16 lows: EM equities 63%, Nasdaq 45%, S&P 42%, HY bonds 30% reflect core bull market leadership of scarce Growth, scarce Yield
  • Global stock market cap up a massive $18.5tn over period, an amount equivalent to the entire US GDP
  • 318 trading days since SPX -5%, the 4th-longest streak since 1928
  • So risk assets can rally further but we expect Q4 “top” in equities and credit driven by: a. pricing-in of US tax reform (= peak Policy), b. rise in MOVE index (= peak Positioning), c. rally in oil + trough in Chinese RMB + upgrades to global GDP (= peak Profits)
  • Tax reform = “peak policy” = buy rumor, sell fact…but too early to sell fact; tax reform = quicker Fed balance sheet reduction and less share buybacks if capex accelerates (since 2009 lows S&P equity market cap up $15.3tn, Fed’s balance sheet up $4.5tn, share buybacks up $3.5tn)
  • Big jump in the MOVE index of US Treasury market volatility (i.e. “bond shock”) catalyst for cross-asset vol, but requires inflation to rise
  • China financial conditions have tightened & EM “carry-trade” unwind another source of cross-asset vol (Chart 3)…Chinese policy panic kickstarted this 18-month rally, and consensus now much more complacent on China

Meanwhile, as Hartnett concludes, the pain for active managers continues, because in a week in which ETFs saw another inflow of $1.2 billion, mutual funds suffered their latest $3.3 billion outflows.

via http://ift.tt/2x2nby6 Tyler Durden

Hate or Hoax? When It Comes to Campus Bias Incidents, We Usually Have No Idea

HateAt American University this week, a man entered several campus buildings and posted racist fliers on bulletin boards. Attached to the fliers were pieces of cotton—reminders that black people were once slaves.

It’s a disturbing incident. Campus police are investigating, and they have identified a suspect in what they are calling a “property-defacement” bias incident: a white, middle-aged man wearing construction gear and carrying a tool box.

That makes this case fairly unique. When someone commits an apparent act of bigotry at a university, he or she usually gets away with it. We often don’t know who is posting the racist flyer, hanging the noose, writing the anti-gay slur. And we also don’t know why.

These are important details to keep in mind as we consider a BuzzFeed investigation on the purported wave of hate that has struck college campuses in the wake of Donald Trump’s election to the presidency. The piece, provocatively titled “Imagine Being Surrounded By People Who Hate You And Want To See You Dead,” reports that “in the first comprehensive review of hate speech at higher education institutions since the 2016 election, BuzzFeed News has confirmed 154 total incidents at more than 120 campuses across the country. More than a third of the incidents cited Trump’s name or slogans; more than two-thirds promoted white supremacist groups or ideology.”

These incidents were reported to Documenting Hate, a ProPublica database of hate crimes and other bias incidents. BuzzFeed reviewed 400 of them, and was able to verify that 154 happened. According to BuzzFeed‘s descriptions of the incidents they chose to highlight, they include conduct that is probably criminal, conduct that is probably not criminal but may violate university policy, and conduct that is certainly not criminal and is likely protected by the First Amendment, which supersedes campus speech codes. They count everything from a student at the University of Colorado yelling “go back to Mexico” at a Latina professor to fliers urging students to reject “anti-white propaganda.”

Buried in the second half of the article is an interesting passage:

Colleges typically responded to bias incidents quickly and to the satisfaction of their students. Most students who spoke with BuzzFeed News for this story commended their school leaders for how they handled the situations. In nearly every case, university presidents sent off mass emails condemning the hate speech and asserting that officials were making efforts to track down the culprits. But perpetrators were caught in less than 5% of cases involving vandalism or threats. At least three investigations led college officials to conclude that a racist incident was a hoax.

So perpetrators are almost never caught, and in three of the reviewed cases, the incident was a hoax. Three is not a lot, but keep in mind that only 5 percent of the 154 cases were solved in the first place, which comes out to 7.7 cases. Here’s the million-dollar question: Are the three hoax incidents included in that figure? I would think they have to be, since how could the authorities know they were hoaxes unless the perpetrator was caught? Assuming that’s the case—I don’t know how else to make sense of BuzzFeed‘s counting here—then 3 out of 7 or 8 of the “solved” cases were fakes, which is a stunningly high ratio of hoaxes to actual hatred.

Perhaps it’s the case that out of 154 cases, just three were hoaxes. But then I’m not sure how anyone could confidently make that assertion, since the authorities have no idea who perpetrated the incident in the overwhelming majority of incidents.

I emailed all three authors of the BuzzFeed story for clarification on these numbers. They did not respond. That’s a shame: If BuzzFeed is going to run the deliberately inflammatory headline “Imagine Being Surrounded By People Who Hate You And Want To See You Dead,” its writers should be able to answer questions about whether the data support this nightmarish fantasy.

All we know is that some bias incidents—like the one at American University—are true cases of racism, and that some are hoaxes. (Many others are mere accidents.) If BuzzFeed writers inadvertently figured out something useful about the relative likelihood of each, it would be kind of them to spell that out more clearly.

from Hit & Run http://ift.tt/2x2xZMP
via IFTTT

Catalan Separatists Unveil Ballot Boxes; Spain To Shut Barcelona Airspace, Says “Referendum Won’t Happen”

The Spanish government reiterated its angry rhetoric this morning that the "Catalan referendum won't happen" with Íñigo Méndez de Vigo saying "organizers will be held responsible," after they unveiled the ballot boxes and discussed the 2,315 polling stations to be used.

Madrid, which claims the authority of a constitution that declares the country to be indivisible, remained implacably opposed to the vote. As Reuters reports,

“I insist that there will be no referendum on Oct. 1,” central government spokesman Mendez de Vigo told a news conference following the weekly cabinet meeting, reiterating that the vote was illegal.

It appears the Catalans are ignoring him…

In a sign that large crowds are again expected on the streets on Sunday, department store chain El Corte Ingles said it would shut three stores in central Barcelona. The central government said airspace above the city would be partly restricted.

 

Lines of tractors draped in the red-and-yellow striped Catalan flag left provincial towns on Friday, planning to converge on Barcelona in a sign of support for the referendum.

Catalonia's vice president says more than six out of ten voters are expected to cast ballots during the region's independence referendum despite the Spanish government's aggressive efforts to stop the vote. As AP reports,

Oriol Junqueras said Friday that Catalan citizens will be able to vote on Sunday "even if somebody takes voting stations by assault and tries to avoid something as natural as placing a voting slip in a ballot."

 

Spain's Constitution says that only the nation's government can call a referendum on sovereignty. Police forces acting on judges' orders have seized ballots and arrested regional officials in an unprecedented crackdown.

 

Junqueras says an internal poll showed that more than 60 percent of the 5.3 million eligible voters plan to cast ballots.

As TheSpainReport reports, after weeks of speculation, Catalan regional government ministers unveiled the ballot boxes they mean to use for the suspended referendum vote this Sunday.

The ballot boxes are made of grey and black opaque plastic.

 

 

During a press conference before the unveiling of the ballot boxes, Deputy First Minister Oriol Junqueras said there would be 2,315 polling stations on Sunday, with 6,239 voting tables, and that there were 7,235 people involved in organising the referendum.

 

"Neither the Catalan government nor Catalan citizens are doing anything wrong", he said.

Fascinatingly, Bloomberg reports that Spain’s aviation authority will restrict airspace over Barcelona during the weekend of illegal referendum on Catalan independence.

Step is in line with policy during events that attract large crowds such as major soccer matches or demonstrations, spokesman for Public Works Ministry says by phone.

Of course, enforcing the government's wishes falls to the local police, and as The Wall Street Journal notes, they continue to see their loyalties tested…

Since it was established in the 1980s, Mossos has been one of the most visible symbols of Catalonia’s autonomy, answering directly to the Catalan Interior Ministry rather than to Madrid. Among the other 16 Spanish autonomous regions, the Basque Country is the only other to have a fully independent police force.

 

Some Mossos officials and other people familiar with the matter say Mossos won’t stop people from voting Sunday as long as there’s a sizable number of voters inside polling stations, which those officials believe would give officers public-order grounds not to intervene.

 

“Some of the measures asked by prosecutors can’t be followed without creating a bigger conflict than the one they say they want to prevent,” Joaquim Forn, Catalonia’s regional interior minister, said in an interview.

Catalan leader Puigdemont called on the police not to act in a “political” way when carrying out their duties on Sunday.

“I would like them to use the same standards that the Catalan regional police use. Not political standards, not on political orders, but policing and professional standards,” he said.

The Wall Street Journal explains how they believe the Catalan Independence vote is likely to play out

What can be expected from the referendum?

The government of Catalonia, a wealthy region in northeastern Spain with a distinct history and language, is forging ahead with an independence referendum, even though Spain’s constitutional court has suspended the vote and the central government has declared it illegal. Spanish officials, prosecutors and judges have launched an all-out effort to block it by sending thousands of police to the region to confiscate ballots and ballot boxes, shutting down pro-referendum websites and arresting Catalan officials. Even though police have orders to stop the vote, the Catalan government has said it will still go ahead.

 

Will police try to stop the vote from taking place?

Madrid has sent about 4,000 national police officers to the region, with orders to seal polling stations. But that may not be enough to stop the ballot in many sites, especially if the Catalan police corps claim public-order grounds to avoid intervening when a sizable number of voters are present. Pro-independence supporters plan to occupy polling stations starting Friday, but police might still succeed in sealing off a few of them. This could force some attendees to hold a makeshift vote instead.

 

What is the result likely to be?

The latest official poll showed the independence camp has lost some support over the past three years: 35% of Catalans want independence, compared with 49% in 2013. But a survey earlier this month by Catalan pro-independence newspaper ARA found that almost 70% of those who are planning to vote are in favor of secession. However, because Madrid and pro-union parties have declared the referendum illegal, those supporting Catalonia remaining part of Spain are likely to boycott the vote, suggesting a result in favor of secession is more likely.

 

If the vote is in favor of independence, then what?

That is unclear. Catalonia’s regional president, Carles Puigdemont, has promised to declare independence. But a unilateral move is unlikely to have international recognition, and members of Mr. Puigdemont’s own party have denied a declaration of independence will happen. Such an attempt would likely drive Madrid to seize control of the regional government, although some still hope Barcelona—the Catalan capital—and Madrid could sit down to negotiate a resolution to the region’s grievances. Regardless, pro-independence activists are planning large demonstrations and possibly a general strike aimed at pressuring Madrid to offer a negotiated path toward separation or compelling the European Union to mediate.

Will the economy and financial markets be disrupted?
So far, investors have shown only moderate concern, with Catalan bank stocks struggling a bit. Spain’s borrowing costs have widened slightly relative to Germany’s, with investment banks like J.P. Morgan Chase & Co. recommending investors sell some Spanish bonds. Economic data are strong for both Spain and Catalonia, but a prolonged general strike in the region could hamper the recovery. Were Catalonia to separate, ratings companies warn that Spain could have trouble to repay its debts, since Catalonia makes up 19% of Spanish gross domestic product, but Catalans could face significant financial disruption during their transition toward independence.

For now, as Citi notes, while Catalan bonds have weakened, the referendum has not been a focus of markets; but it appears the Spanish authorities are getting anxious.

As Bloomberg reports, lenders who may be holding their breath over Spain’s secessionist upheaval can sleep calmly.

The central government will guarantee payment to all creditors of the Catalan regional administration, according to a Budget Ministry official.

Regardless of Catalan separatists’ attempts to hold an illegal referendum for independence on Sunday and possibly declare independence from Spain, the ministry will make sure banks, suppliers and civil servants keep getting paid on time, the official said.

Finally, and entirely unexpectedly, Brussels has very much come down on the side of Madrid with AP reporting that European Union officials have ruled out helping to mediate the clash between Spain's government and Catalan officials over Catalonia's upcoming independence referendum.

European Parliament President Antonio Tajani said at an EU summit in Estonia on Friday that the dispute is "a Spanish problem in which we can do little. It's a problem of respecting Spanish laws that Spaniards have to resolve."

 

Catalan officials, including the mayor of Barcelona, have asked the EU to mediate the tense standoff ahead of Sunday's planned vote that Spanish authorities say is illegal.

 

Tajani says the EU is maintaining its support of Spain's government because "on a legal level, Madrid is right."

 

He says: "I think it's important to talk on a political level after Monday."

Of note is the fact that The EU has said Catalonia will be ejected from the bloc, if it declares independence.

via http://ift.tt/2x2zVow Tyler Durden

Airports Systems Just Crashed Globally; Could The Power Grid Be Next?

Authored by Mac Slavo via SHTFplan.com,

Airport computer systems crashed around the globe yesterday. The crash caused passenger delays, angst, and fright among travelers, but a more ominous question has arisen in light of this glitch. Could the next failure be a worldwide power grid outage?

Thousands of travelers were grounded yesterday when a computer glitch took down check-in systems at more than 100 airports worldwide. The crash left passengers waiting in long lines at counters while trying to check-in for their flights. T Amadeus Alta, the company that provides the software, confirmed it is experiencing a “network issue that is causing disruption,” The Telegraph reported.

The glitch affected even massive airports,  such London’s Heathrow International Airport, Charles de Gaulle Airport in Paris, and Ronald Reagan International Airport in Washington, D.C. “Technical teams are working on the problem, services are gradually being restored,” the software company said. After a few hours, officials at Gatwick and Heathrow airports said their systems were “back up and running” after the “momentary IT glitch,” adding there may be a delay due to the outage.

A statement on the glitch read, “A small number of airlines are currently experiencing intermittent issues with their check-in systems at airports around the world — including at Heathrow.”

 

It continued, “Passengers will still be able to check-in for their flight, although the process may take slightly longer than usual.”

Passengers took to social media to complain about the crash.

According to Fox News, it is still unclear when all the systems will be back up and running, but it begs the question: what if a power grid failure is next?

It isn’t like it’s never happened, but it may only be a matter of time before it occurs on a massive scale.

In December of 2015, 230,000 people in Western Ukraine lost power after 30 substations were mysteriously shut off. Contrary to what most people assumed at the time, this wasn’t an innocuous power outage. The authorities would later admit that the loss of power was caused by a cyber attack, which marked the first time that malware was successfully used to attack a power grid. A similar, albeit more sophisticated cyber attack, occurred one year later just outside of Kiev. Given the current tensions between Russia and Ukraine, it’s widely believed that the Russian government was responsible for these incidents.

 

However, there’s more to this story than meets the eye. A computer security company has been investigating these attacks, and has discovered the malware that was used to take down the grid. They’ve found that it’s far more dangerous and easier to use than anyone realized before. –Ready Nutrition

It may not necessarily be malicious malware that takes down the grid either.  Even solar flares can cause some incredibly intense issues.

Most policy makers have not taken the threat of an earth-directed solar flare seriously, even though a senior member of the Congressional Homeland Security Committee recently warned that there is a 100% Chance of a Severe Geo-Magnetic Event Capable of Crippling Our Electric Grid.

If such an event were to happen Congressman Roscoe Bartlett, who has advised people to develop individual preparedness plans based on the threat of massive solar flares or electro-magnetic pulse detonations, says that it would take upwards of 18 months to bring the grid back online because of a decaying national infrastructure. –SHTFPlan

With the crash of the airport system affecting people worldwide, imagine how much chaos would ensue should the power grid go down over most of earth.

via http://ift.tt/2xQC8ra Tyler Durden

Republicans Should Reject ‘Bipartisan’ Solution for Obamacare: New at Reason

There was nothing bipartisan about the way Obamacare was passed, so why should “saving it” be?

David Harsanyi writes:

The latest iteration of Obamacare repeal has likely failed. Senate Republicans were unable to pass a watered-down repeal effort that offered states some meager level of federalism in the form of block grants. Now, we’re again going to hear a lot of noise about the need to embrace a “bipartisan” approach to fix health care.

“Since nearly every promise we made with Obamacare has failed, you now have a responsibility to save it”: To many, this might seem like a shamelessly counterintuitive thing to say, but it’s very popular among Democrats. The problem is that any effort that further entrenches a wholly partisan law is not, in any genuine way, “bipartisan.” And Republicans have zero reason to play along.

For the first time in American history, the party in power—complete power, mind you—is being asked to bail out the minority’s signature failed reform. Not just any reform: Democrats unilaterally shoved through the system a wide-ranging national restructuring of a vital part of the economy. It was an effort that blew up dozens of governing norms and was built on a giant lie, a manipulated Congressional Budget Office score and a process that, outside a few Kabuki theater hearings and technical amendments, ignored half the country while coercing every citizen’s participation. In fact, many of the people being asked to bail out Obamacare warned that Obamacare would need bailing out.

View this article.

from Hit & Run http://ift.tt/2k7euRY
via IFTTT

Consumer Sentiment Dips In America As Home-Buying Hope Crashes To 5-Year Low

Americans' confidence in the economy has waned slightly following Hurricanes Harvey and Irma, which caused more than $100 billion in damage, pushed up gas prices and spurred a jump in unemployment filings.

Overall, Bloomberg reports that the share of consumers expecting good times financially in the economy fell to 47 percent from 54 percent in August.

Share of consumers judging home-buying conditions as favorable was at five-year low

 

Richard Curtin, director of the University of Michigan consumer survey, said in a statement.

In the past year, there has been a long list of issues that could have derailed the overall level of consumer confidence, including the unprecedented partisan divide, North Korea, Charlottesville, and the hurricanes,” 

 

“Confidence has nonetheless remained very favorable, moving sideward in a very narrow positive range.”

via http://ift.tt/2k9LqJP Tyler Durden

Gold & Silver create bearish reversals this month, says Joe Friday

Below looks at Gold and Silver patterns on a “Monthly basis” over the past 7-years. The rally in Gold and Silver since early 2016, has taken both of them back to test levels that were heavy for each of them over the past few years.

Gold and silver weekly charts

CLICK ON CHART TO ENLARGE

Joe Friday Just The Facts Ma’am– Gold and Silver created “Monthly Reversal” pattern this month at each (2), just under key overhead resistance at (1). These monthly reversals are the largest monthly reversals for both metals in the past few years.

One-month reversals at resistance in time could be concerning to Gold & Silver bulls. A one-month reversal pattern doesn’t prove that the 18-month rally is over. The reversal pattern could be something to pay close attention too, since Gold and Silver traders have created crowded bullish trades, as resistance tests are in play at each (1).

Metals bulls would LOVE to see both break out at (1). If you would like to stay abreast of these patterns in Gold & Silver, we keep Premium and Metals members updated each week on these patterns.


The Power of the Pattern at work to save people time, improve decision-making & results.   

We identify high probability big pattern reversals and breakouts in global indices, sectors, commodities, several metals and select individual stocks

Send us an email if you would like to see sample reports or a trial period to test drive our Premium or Weekly Research

 

Receive Chris Kimble’s research by email posted to his blog daily  http://ift.tt/2xLW1gK

 

Email services@kimblechartingsolutions.com 

 

Call us Toll free 877-721-7217 international 714-941-9381

 

Website: KIMBLECHARTINGSOLUTIONS.COM

 

 



via http://ift.tt/2xKJUST kimblecharting

Kevin Warsh Fed Chair Odds Soar After WSJ Report Of Trump Meeting

Kevin Warsh’s PredictIt odds to be the next Fed chair soared moments ago after the WSJ reported that President Trump and Treasury Secretary Steven Mnuchin met with the former Fed governor on Thursday to discuss his potential nomination as the next Federal Reserve chairman, “a White House official said, signaling that the West Wing is moving ahead with a process that the president has said he would like to have completed by the end of the year.”

In immediate reaction, Warsh’s odds jumped by 10% to 45% while Janet Yellen’s tumbled by 8 to 24%.

That said, “Chairman Warsh” is not assured just yet, and as the WSJ adds, other names in contention include current Fed Chairwoman Janet Yellen, Stanford University economist John Taylor and John Allison, the former BB&T Bank chief executive, according to people familiar with the process. Mr. Allison was offered a position on the central bank’s board of governors earlier in Mr. Trump’s tenure, but turned it down, said people familiar with the offer.

Mr. Warsh is a former Fed governor and was a member of the president’s Strategic and Policy Forum, a group of business leaders that disbanded in August in protest over what they said was Mr. Trump’s failure to sufficiently condemn racism. He was also an economic adviser to 2016 Republican presidential candidate Jeb Bush, who was considered the front-runner for the nomination before Mr. Trump’s political rise surprised the political establishment.

 

Mr. Warsh, a veteran Republican economic policy maker, is married to Jane Lauder, granddaughter of cosmetic icon Estée Lauder . His father-in-law, businessman Ron Lauder, has been lobbying the White House to have the president name his son-in-law to the central bank’s highest post, said people familiar with those conversations.

Most notably, Warsh has historically been one of the most prominent inflation hawks and outspoken critics of existing Fed policies, which may explain the sharp move higher in the dollar and the corresponding slide in TSY prices.

via http://ift.tt/2hDGziT Tyler Durden

Chicago PMI Explodes Higher, Beats By 5 Standard Deviations

Everything is awesome again in Chicago apparently…

Against expectations of a modest drop from 58.9 to 58.7, MNI's Chicago Business Barometer exploded higher to 65.2 in September…

 

This is well above the highest analyst expectation and 5 standard deviations above expectations…

Under the hood, it's also awesome…

  • Prices paid rose at a faster pace, signaling expansion
  • New orders rose at a faster pace, signaling expansion
  • Employment rose and the direction reversed, signaling expansion
  • Inventories rose and the direction reversed, signaling expansion
  • Supplier deliveries rose at a faster pace, signaling expansion
  • Production rose at a faster pace, signaling expansion
  • Order backlogs rose at a faster pace, signaling expansion
  • Business activity has been positive for 12 months over the past year.
  • Number of components rising vs last month: 7

via http://ift.tt/2ydkK0D Tyler Durden

Trump Now Live-Tweeting The Market: “Record High For S&P 500”:

Apparently, having nothing else to comment on this morning, moments ago the president tweeted that as of this moment, the S&P just hit its latest, 40th YTD, all time high in 2017.

“RECORD HIGH FOR S & P 500!”

Putting this declaration in context, in April 2016, Trump was feeling increasingly bearish about stocks. He told The Washington Post that they were overvalued and that the strong data that showed a healthy economy were essentially phony.

“I think we’re sitting on an economic bubble. A financial bubble,” Mr. Trump said.

By September, he was arguing that the Federal Reserve was propping up a “false economy” that is actually weak.

“The only thing that is strong is the artificial stock market,” Mr. Trump told Reuters.

Trump saved his most brutal assessment of the stock market, and the economy, for his first presidential debate with Hillary Clinton. In response to her criticism of his economic proposals, he said that the recovery was the worst since the Great Depression and that it would come crashing down the moment that interest rates rise.

“The only thing that looks good is the stock market, but if you raise interest rates even a little bit, that’s going to come crashing down,” Mr. Trump said. “We are in a big, fat, ugly bubble.

Somehow we doubt there will be similar presidential enthusiasm on the way down.

via http://ift.tt/2xGyMor Tyler Durden