Written by Gary
Stocks fell after the ECB slashed its economic growth forecast for 2019 (SPY -0.8%). US Fed buys no mortgage bonds, sells none.
The Market in Perspective
Here are the headlines moving the markets. | |
Exclusive: U.S. SEC scrutinizes fairness of stock exchange pricingThe U.S. Securities and Exchange Commission is investigating whether the multi-tiered pricing system used by stock exchanges favors large brokers at the expense of small ones, according to a person familiar with the matter. | |
Democrats probe whether White House interfered in AT&T Time Warner mergerTwo U.S. House Democrats asked the White House and Justice Department to turn over documents that could show whether Republican President Donald Trump sought to intervene in the regulatory review of AT&T Inc’s $85 billion acquisition of Time Warner Inc. | |
Huawei fights back against U.S. blackout with Texas lawsuitChinese telecoms equipment maker Huawei Technologies sued the U.S. government on Thursday, saying a law limiting its American business was unconstitutional, ratcheting up its fight back against a government bent on closing it out of global markets. | |
Explainer: Huawei faces slim odds in new U.S. court fightHuawei Technologies Co Ltd has opened up a new front in its battle with the U.S. government by filing a lawsuit challenging a congressional ban on federal agencies’ use of the Chinese technology company’s products. | |
U.S. State Department declines comment on Huawei suitThe U.S. State Department declined to comment on Thursday on a lawsuit against the United State by Chinese telecommunications equipment maker Huawei Technologies, and said Washington advocates for secure networks that are free from undue foreign government influence. | |
American Airlines grounds 14 planes due to overhead bin issueAmerican Airlines Group Inc grounded 14 Boeing 737-800 airplanes on Thursday after complaints by pilots that overhead bins on some recently-retrofitted aircraft interiors were not closing, an American official said. | |
Wall Street falls for fourth day after dour ECB viewWall Street’s main indexes headed toward a fourth consecutive session of declines on Thursday, after Europe’s central bank said it would defer interest rate hikes and offered banks a new round of cheap loans, raising fresh concerns about global economic growth. | |
Abercrombie expects redesigned stores to boost 2019 sales, shares surge(This March 6 story, corrects paragraph 2 to say company will be closing up to 40 stores, not 40 stores; also drops reference to on-trend clothing boosting demand for the Abercrombie brand) | |
Tesla CEO Musk’s security clearance under review over pot use: BloombergTesla Inc and SpaceX Chief Executive Officer Elon Musk’s security clearance is being reviewed by the Pentagon after the billionaire smoked marijuana on a California comedian’s podcast in September, Bloomberg reported on Thursday, citing a U.S. official. | |
Dollar Jumps, Stocks & Bond Yields Dump As Not-Dovish-Enough Draghi DisappointsCan you remember the last time the stock market dropped on the day a central bank went full dovetard? China is unstoppable – an early dip was bid, but some very last minute weakness was evident leaving all but SHCOMP red on the day… | |
Why Kyle Bass Is Doubling Down On “Big Yuan Short”If there was one investor who should be worried about a favorable outcome of any China trade “deal” which according to Treasury Secretary Steven Mnuchin would result in the “strongest ever” currency agreement with China, preventing Beijing from aggressively devaluing its currency, it would be long-time China bear, Kyle Bass who has been shorting the Yuan ever since 2015 as a bearish bet on China’s economy. But Bass is not worried; in fact according to a new Bloomberg interview, the Texan is eager to take advantage of the recent yuan appreciation to add to his short, as any demand for China to keep its currency stable as part of a trade agreement will fail to support the yuan against the dollar in his opinion. Of course, the Hayman Capital founder is also talking his book: the firm entered its short bet on the offshore yuan in 2015 (just ahead of China’s August 2015 devaluation), and while the trade has seen its share of profits (in 2018) and losses (in 2017) Bass has stayed the course even as many of his China beah peers have thrown in the towel as Wall Street banks are increasingly revising forecasts to predict strength in the Chinese currency, which is outperforming almost all its counterparts across Asia in 2019. Undaunted, and still believing in fundamentals, Bass repeats his long-running thesis, and says that it’s just a matter of time before China’s deteriorating economy “changes the whole narrative, spurring a weaker yuan and forcing policy makers to eat into foreign-exchange reserves to support it.” Bass also expects that China’s $3.1 trillion FX stockpile – the world’s largest – can only fall so far, and he believes that a drop below the $1.5 trillion-to-$2 trillion range would impede the flow of trade, much of which is financed in greenbacks.< … | |
McCulley Embraces MMT While BlackRock’s Larry Fink Says It’s “Garbage”Paul McCulley has become the second notable Pimco alum to embrace Modern Monetary Theory. During an interview with Bloomberg TV, the former Pimco chief economist and current Cornell Law School professor said he has a lot of sympathy for the controversial economic theory du jour, which has been embraced by “Democratic Socialists” like Alexandria Ocasio-Cortez (who sees it as an option for financing her ‘Green New Deal’) and decisively rejected by Fed Chairman Jerome Powell (who flatly told Congress that MMT “is just wrong”) and former Treasury Secretary Larry Summers (who said it was fallacious on multiple levels). Though he’s “not a card-carrying MMTer”, McCulley argued that such a radical shift in the monetary policy outlook would offer a “robust architecture for a fiat currency world.” Furthermore, today’s monetary thinking, McCulley said, is left over from a time when America’s money was backed by gold. | |
Consumer Credit Storms Above $4 Trillion, As Credit Card Debt Hits Record HighAfter a few months of wild swings, in January US consumer credit normalized rising by $17 billion, in line with expectations, following December’s $15.4 billion increase. The continued increase in borrowings saw total credit storm above $4 trillion, and hitting a new all time high of $4.034 trillion on the back of a America’s ongoing love affair with auto and student loans, and of course credit cards. … | |
January 2019 Headline Consumer Credit Rate of Growth UnchangedWritten by Steven Hansen The headlines say consumer credit rate of annual growth was unchanged relative to last month. | |
Market Extra: The Dow is the verge of a bullish golden cross, but stock-market analysts aren’t exactly cheeringIt should be time for celebration on Wall Street. A bullish golden cross is on the verge of materializing in the 122-year-old Dow Jones Industrial Average, coming after an anxiety-provoking dip more than two months ago. But some analysts are worried. Here’s why. | |
MarketWatch First Take: Why the ECB’s surprise policy moves sent shivers through global stock marketsMario Draghi has been grumbling about the deleterious side effects of trade tensions and other geopolitical worries for months, but the European Central Bank’s surprise policy moves in the face of a slowing global economy appeared to bring the danger home to investors. | |
The Tell: This trader turned $100,000 into $2.5 million in just a few weeks; now he’s getting ready for ‘the next big catalyst’In 2017, Texas entrepreneur Steve Oliverez had a hunch. He’d already enjoyed a pretty good run during the stock market’s “Trump bump,” but, with the year winding down, he spotted what he believed to be an opportunity for exponential gains. Millions of dollars later, he’s taking a hiatus from active trading. |
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