The Heisenberg Report | TalkMarkets | Page 87
Contributor's Links: The Heisenberg Report
Perhaps more than any other time in the last six decades, the fate of markets is inextricably intertwined with the ebb and flow of geopolitics. From the ECB's attempts to use the central bank's balance sheet to influence political outcomes across the eurozone to Saudi Arabia's efforts ...more

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One Chart Explains How Much The Health Care Vote Matters For Markets
“Way” back on Thursday, we showed you the following chart which we (only half) jokingly suggested may portend trouble ahead for high-flying equities trading at absurd multiples.
TGIF: Markets Nervous As Trump Dares Congress To Pass Health Care Bill No One Likes
Overnight, the dollar found its footing against the yen as 10Y yields rise on what I guess you could say was “optimism” around the notion that Trump’s ultimatum will win the day in terms of pushing Congress to vote on the GOP health bill.
This Is How Far Oil Prices Have To Fall To Trigger Junk Bond Chaos
At what oil price level should the sensitivity of US high yield energy spreads escalate? We believe the low $40s is the key threshold.
Trader: “US Stocks Are Destined To Drop”
Self-described “perma-bull” and former FX trader Mark Cudmore is taking a long-term bullish outlook on things but reminding us that the Trump brand has likely done lasting damage to Brand USA.
The Trumpcare Vote: Previewing Thursday’s Big Event
The ACA repeal is generally seen as a prerequisite for moving forward with tax reform and other things that matter for the economy and, by extension, for markets.
Stocks Versus Bonds: “Old Normal Vs. New Normal”
Should 1oY yields reprice rapidly higher, stocks want to view Treasury selloffs as risk-off triggers (i.e. tantrum-like behavior), you may want to consider some new commentary out Wednesday from BofAML.
“Some Folks Missed Payments”: There’s A Storm Brewing In China
Beijing is on a tightrope between keeping conditions loose enough to support growth and tight enough to discourage the proliferation of leverage and speculative excess. What happens when these two competing agendas collide while the FED is hiking?
Oil Gets (More) Bad News – Meanwhile, Fitch Says Saudis Will Be Bankrupt Any Day Now
Tuesday’s API numbers tipped: a larger than expected build in US stockpiles.
Stock Selloff Goes Global
Drawdowns happen more often than you think they do, and over time, regional equity markets have become increasingly correlated which makes it difficult to find diversification (i.e. a place to hide) when we get days like Tuesday.
"This Is Not A Tail Event": A Subtle Reminder About Stock Market Mayhem
Large drawdowns happen a lot more often than you probably care to think about.
Here Are The “4 Political Risks” Goldman Is Watching
There’s lots going on in Washington this week and with all the headline hockey, it’s sometimes hard to separate the wheat from the chaff.
Euro Jumps To 6-Week High After Lunatic Loses Key Debate
We start Tuesday in Europe in the aftermath of the closely watched presidential debate at which Marine Le Pen had the following message for Donald Trump: “I see your travel ban and border wall, and I’ll raise you one ban on legal immigration.”
“Where The Wild Flows Are”: Equity Funds See Largest Inflow In 13 Weeks Before Fed
There’s been no shortage of discussion this year about flows into US equities. Of course these flows have been catalyzed and perpetuated by the “Trump trade” meme.
As Treasury Yields Fall, Ask Yourself: How Long Are They Going To Let This Go On?
This seems like a good time to remind you that not everyone is buying the notion that the Fed is happy with the market’s reaction to last week’s rate hike.
Is “Tantrum” Risk Rising Behind The Scenes?
Namely that you really, really need a negative stock-bond return correlation when vol spikes and there’s blood in the water in one asset class or the other. Why? Simple: if everything’s moving in the same direction, there’s no buffer in a drawdown.
More Trouble In Used Car Land: Prices Drop Most Since Crisis Sparking Deflation Worries
CPI for used vehicles declined for the twelfth consecutive month [and] further declines, driven in part by an increase in off-lease vehicles, are expected to place pressure on realization and recovery rates for auto lease and loan ABS.
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