Tag: finance

The Nasdaq, Russell 2000, and Dow Transports have been rescued in their high-beta manner all the way back to green by an initial USDJPY ramp to ignite some momentum "off the lows". Treasuries and credit refuse to  play along and even USDJPY has decoupled as stocks surged on a VIX-slamming (from over 17 to 15.50) ramp to unch. Safe-haven buying of camera-on-a-stick continues (+8% today).

Back to green…

 

With camera-on-a-stick squeezing ever higher…

 

On a sea of USDJPY rampage…

 

and VIX-slamming (from over 17 at the open)

 

But bonds ain't buying it…

 

Charts: Bloomberg

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Russia’s RTS Index has dropped over 20% from its post-Sanctions 1.0 highs in June, officially entering a bear market. The Ruble continues to slide, breaking above 39.50 against the USD – record weakness. Whether it is US/EU sanctions “costs” and/or merely EM risk-off hot money outflows is unclear, but what is clear is that Russian stocks are extremely cheap…

 

 

Chart: Bloomberg

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One would think that the world’s most important artificial waterway has working traffic lights and proper transit control. One would be wrong.

According to Egypt’s Al-Ahram website, two container ships collided on Monday morning in Egypt’s Suez Canal.

The German Colombo Express was coming in from the Mediterranean Sea when it hit the Singaporean ship Maersk Tanjong half a kilometre from the Port Said port, Al-Ahram said.

 

Both ships sustained minimal damage; four containers fell into the canal, which the Canal Authority retrieved. Navigation along the canal was temporarily interrupted for three hours.

 

The SCA sent vessels to lead both ships to the Al-Balah bypass so they could continue their journeys.

Ok, we get airplanes slamming into each other: 3 dimensions, clouds, all that. But two ships, sailing at a few knots, in water as smooth as glass, with virtually unlimited visibility… ?

And in other news, if ISIS had any doubts about how to adversely impact the world in the most actue manner, especially after the recent article “ISIS’ Next Target: The Suez Canal“, all such doubts should be gone now. Assuming, of course, ISIS actually is what the western media wants everyone to believe it is.

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Following last week’s explosion higher in new home sales (despite surging record high prices), it is somewhat intriguing that pending home sales would tumble over 4.1% YoY, and drop 1.0% MoM (missing expectations of a 0.5% drop) and the 2nd biggest drop in 2014.

The ‘stunning’ rationale for this miss, provided by NAR’s chief economist, is… “fewer bargain-priced homes’ (which is odd given record prices and record surge in new home sales), and a “rising rate environment” (except rates are collapsing), with hope for the future based on the “employment outlook for young adults improving and their incomes rising” (more lies) and a “shift to more traditional first-time buyers who need mortgages” (except mortage apps are at 20-year lows).

 

Just last week, New home sales rose the most since 1992:

 

but Pending Home Sales dropped almost the most in 2014…

 

Do not show NAR Chief Economist Larry Yun this chart…

 

“Exiting home sales are expected to be stronger in the second half of the year behind improved inventory conditions, continuously low interest rates, and slower price growth”

NAR, Lawrence Yun

 

Charts: Bloomberg

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Russia’s Gokhran Buying Gold Bullion In 2014 and Will Buy Palladium In 2015

Gokhran, the Russian precious metals and gems repository, said it has been buying gold bullion in 2014 and will likely to start buying palladium bullion in 2015, Interfax news agency reported this morning, citing the head of Gokhran, Andrey Yurin.

GOKHRAN, Russian State Precious Metals and Gems Repository

Gokhran has been buying gold bullion on the Russian market this year and has no plans to sell palladium from stock in 2014 , Yurin said.  

Gokhran’s palladium reserves are a state secret and analysts try to guess the level each year but they are widely believed to have been depleted according to Reuters.

Gokhran was influential on global platinum group metals (PGMs) markets in the 1990s and 2000s, when its palladium stocks, accumulated during the 1970s and 1980s, came to the market, depressing prices.

Gokhran is the State Precious Metals and Gems Repository which is a state institution under the Russian Ministry of Finance. It is responsible for the State Fund of Precious Metals and Precious Stones of the Russian Federation. It is responsible for the purchase, storage, sale and use of precious metals, precious stones, jewellery, rocks, and minerals by the State Fund.



Russia again added to its growing and increasingly substantial gold reserves in August, with the Russian central bank purchasing  232,510 ozs (7.23 tonnes) and bringing its total gold reserves to 35.769 million ozs or 1,112.5 tonnes.

Likewise, the National Bank of Kazakhstan purchased a very large 795,213 ozs or 24.7 tonnes in August bringing its total gold reserves to 5.848 million ozs (181.9 tonnes).



Palladium is already in a structural deficit and this new source of demand should result in palladium continuing to see gains in the coming months.


MARKET UPDATE
Today’s AM fix was USD 1,217.75, EUR 955.71 and GBP 750.54 per ounce.

Friday’s AM fix was USD 1,222.25, EUR 958.70 and GBP 749.11 per ounce.

Gold fell $3.50 or 0.29% to $1,217.50 per ounce and silver climbed $0.11 or 0.63% to $17.63 per ounce Friday. Gold and silver were both down on the week at 0.01% and 1.51% respectively.

Gold in Singapore was essentially flat, trading around the $1,219/oz level and remained tethered to this level in London trading. Palladium gained about 1% while silver and platinum were largely unchanged.

The dollar hit a four year peak against a basket of currencies this morning and this is pressuring the precious metals.

Gold Down 5.2% In September and Headed For Quarterly Loss Of Over 8%
September has been a poor month for precious metals. Gold is down 5.2%, despite it being gold’s strongest month from a seasonal perspective. The price fall means that gold is heading for the first quarterly loss this year.

Silver has fallen by a larger amount and is down 9.6%. While platinum is 8.3% lower.

Palladium’s 12.7% drop this month means that it is on track for its worst monthly performance since September 2011. It remains higher for the year and is 12.5% higher than the low in January 2014 at $693/oz.

Demand for physical gold could be affected by the Chinese holiday period that begins this week, MKS note this morning.

“Beginning on Wednesday this week we have Chinese Golden Week commencing, which will keep Chinese markets shut between 1-8 October,” it said. “Given the natural support derived from Chinese physical demand, their absence over this period, combined with another strong payrolls figure expected this Friday, could heap added pressure on the gold. This is a very similar scenario to last year where gold was aggressively sold by speculators during the absence of the Chinese.”


Gold in USD – 5 Years (Thomson Reuters)

Canny buyers  in Asia and globally will use further price weakness to dollar cost average into gold.

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Having rallied exuberantly on the back of hopes a reform-hungry hot-money-flow-encouraging Silva would take the Presidency in Brazil, a new poll this morning shows encumbent Rousseff back in the lead… and Brazilian markets are rapidly unwinding their exuberance. The Ibovespa is down 5% – its biggest drop in over 3 years. Brazil swap rates have spiked over 50bps and bonds bleeding as USDBRL jumps over 3 handles (to weakest since 2008). It appears just 48 hours after a strong rally on Friday, as markets ‘efficiently’ knew everything was great, Rousseff has realised a few well-placed, well-executed poll results and everything changes.

 

As Bloomberg reports,

Datafolha poll late Friday showing President Rousseff lead widening before Oct. 5 elections and amid broad USD strengthening.

 

Rousseff 4ppt ahead of Silva in runoff, up 2ppt vs previous poll; lead widens to 13ppt from 7ppt in 1st round: Datafolha

 

Record TV channel may release new Vox Populi poll, taken Sept. 27-28; last Vox poll showing Rousseff lead narrowing contrasts with Datafolha results

 

New polls from Datafolha and Ibope expected from tomorrow 

And this happens…

 

Individual stocks are getting crushed:

• *PETROBRAS FALLS 9.2% IN SAO PAULO TRADING
• *PETROBRAS EXTENDS DECLINE, FALLS MOST SINCE NOV. 2008
• *BANCO DO BRASIL SHARES FALL 8.3% TO BRL27.35 IN SAO PAULO
• *CYRELA FALLS 5.1% IN SAO PAULO TRADING

via Zero Hedge http://ift.tt/1rxQtyN Tyler Durden

It appears the post-PIMCO-effect is not wearing off. Having had a weekend to soak up the reality of what outflows will mean for Gross’ old shop, credit markets are once again flashing bright red this morning as managers reach for protection ahead of expected redemptions which would force selling into an illiquid market. High-yield spreads are 25bps wider at their highest since early Oct 2013. Equity futures are legging lower with the weakness.

 

 

Which is dragging stocks lower…

 

Bigger picture, things have rolled over quickly..

 

and for those who defend the ongoing equity exuberance of the S&P by noting that their buyback-funding is investment grade backed and high-yield is in trouble due to liquidity and technicals… think again…. the entire corporate bond market is turmoiling…

 

Charts: Bloomberg

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With the biggest Hong Kong protest in recent history taking place over the weekend, and continuing indefinitely because one thing is certain: the local student demands for more democracy and the ouster of HK chief executive CY Leung will not be met, what everyone has focused on is what China’s response, call it crackdown, to the breakout of violence will be. After all, while algos and the Fed’s liquidity tsunami have priced in pretty much everything short of (or including, according to some) World War III, a repeat of Tiananmen square could well be large enough to where it registers as a slight downtick in the Fed’s balance sheet, pardon the S&P 500.

Hong Kong Chief Executive CY Leung

So for all those eager to track the progression of China’s responses to the protests, here is the first official statement via CRIEnglish:

China’s central government is describing the so-called Occupy Central movement in Hong Kong as an “illegal gathering.”

 

At the same time, mainland authorities say they’re confident authorities in Hong Kong are able to handle it.

 

The Occupy group in Hong Kong is opposed to the new plans for universal suffrage in the city.

 

Hong Kong Chief Executive CY Leung says the Hong Kong government considers the Occupy movement illegal.

 

At the same time, Leung says his government plans to continue moving forward with the consultation process.

 

“And in so far as consultations and the question of constitutional development is concerned, it is also important to bear in mind that we have to operate within the framework of the stipulations of the Basic Law and the National People’s Congress Standing Committee’s decisions because these are the legal and constitutional frameworks for Hong Kong’s constitutional developments to go forward in.”

 

Protests this weekend in Hong Kong turned ugly, with police being forced to use tear-gas to disperse demonstrators who were trying to push through police lines.

For now China is merely escalating the verbal rhetoric, and is hoping that the student will get bored and go home. Which they won’t. So what happens then? Well, the following post should provide some insight…

via Zero Hedge http://ift.tt/1voQjLr Tyler Durden

With the biggest Hong Kong protest in recent history taking place over the weekend, and continuing indefinitely because one thing is certain: the local student demands for more democracy and the ouster of HK chief executive CY Leung will not be met, what everyone has focused on is what China’s response, call it crackdown, to the breakout of violence will be. After all, while algos and the Fed’s liquidity tsunami have priced in pretty much everything short of (or including, according to some) World War III, a repeat of Tiananmen square could well be large enough to where it registers as a slight downtick in the Fed’s balance sheet, pardon the S&P 500.

Hong Kong Chief Executive CY Leung

So for all those eager to track the progression of China’s responses to the protests, here is the first official statement via CRIEnglish:

China’s central government is describing the so-called Occupy Central movement in Hong Kong as an “illegal gathering.”

 

At the same time, mainland authorities say they’re confident authorities in Hong Kong are able to handle it.

 

The Occupy group in Hong Kong is opposed to the new plans for universal suffrage in the city.

 

Hong Kong Chief Executive CY Leung says the Hong Kong government considers the Occupy movement illegal.

 

At the same time, Leung says his government plans to continue moving forward with the consultation process.

 

“And in so far as consultations and the question of constitutional development is concerned, it is also important to bear in mind that we have to operate within the framework of the stipulations of the Basic Law and the National People’s Congress Standing Committee’s decisions because these are the legal and constitutional frameworks for Hong Kong’s constitutional developments to go forward in.”

 

Protests this weekend in Hong Kong turned ugly, with police being forced to use tear-gas to disperse demonstrators who were trying to push through police lines.

For now China is merely escalating the verbal rhetoric, and is hoping that the student will get bored and go home. Which they won’t. So what happens then? Well, the following post should provide some insight…

via Zero Hedge http://ift.tt/1voQjLr Tyler Durden