02Apr2019 Midday Update: Wall Street Takes A Breather, Walgreens Slumps On Profit Warning, DOW Down Almost 100 Points, WTI Climbs To $62.40, Bitcoin Jumped As Much As 20%

Here is the current market situation from CNN Money

North and South American markets are lower today with shares in Mexico off the most. The IPC is down 0.87% while Brazil’s Bovespa is off 0.80% and U.S.’s S&P 500 is lower by 0.08%.

Superdry founder named interim CEO as majority of board steps down

Superdry named its co-founder and former boss Julian Dunkerton as interim chief executive officer on Tuesday after a majority of the British fashion group’s board stepped down.

Wall Street takes a breather, Walgreens slumps on profit warning

A three-day surge in U.S. stocks stalled on Tuesday, as a profit warning from drugstore chain Walgreens Boots hit the pharma sector, while investors looked for signs of strength in the economy in the wake of growth worries.

Shares dip after six-month peak, oil nears $70 a barrel

World stock markets were little changed on Tuesday after grazing a six-month high as investors took a breather following a three-day run of gains.

U.S. March, first-quarter auto sales drop in weak start to 2019

Major automakers on Tuesday reported weak sales for March and the first quarter citing a rough start to the year, but said a robust economy and strong labor market should encourage consumers to buy more vehicles as 2019 rolls on.

U.S. manufacturing sector stabilizing, challenges remain

New orders for key U.S.-made capital goods slipped in February and shipments were unchanged, but data for January was revised slightly higher, which could support views that the manufacturing sector was stabilizing.

Shell to quit U.S. refining lobby over climate disagreement

Royal Dutch Shell on Tuesday became the first major oil and gas company to announce plans to leave a leading U.S. refining lobby due to disagreement on climate policies.

Massachusetts says Wynn Resorts executives concealed sexual misconduct accusations involving Steve Wynn

Massachusetts gaming regulators on Tuesday released an investigative report concluding that former executives of Wynn Resorts Ltd concealed sexual misconduct allegations against the casino operator’s billionaire founder, Steve Wynn.

Oil hits 2019 high on signs of tighter supply; Brent eyes $70 a barrel

Oil prices hit their highest of 2019 on Tuesday, with Brent crude approaching $70 a barrel, on the prospect that more sanctions against Iran and further Venezuelan disruptions could deepen an OPEC-led supply cut.

Fiat Chrysler Canada’s auto sales fall 11 percent in March

Fiat Chrysler Automobiles NV on Tuesday reported an 11 percent fall in total March sales in Canada.

Turkish Lira Plunges As Funding Costs Tumble, Shorts Pounce

Commenting on recent gyrations in the Turkish currency, Rabobank’s Michael Every writes that the lira ended Monday’s volatile session on the firm footing appreciating more than 1% versus the dollar as the market continued to digest the outcome of local elections held on Sunday and tried to assess potential implications of Turkey’s biggest cities voting against President Erdogan’s AKP candidates.

That said, Every notes that he “would be careful trying to read too much into the price action in USD/TRY witnessed on Monday. Lira’s liquidity in the offshore market remains tight as reflected in the overnight swap rate sharply again to more than 300% on the day” and adds that “essentially, it is not a properly functioning market.”

As a result, investors who are concerned that the Erdogan administration may turn towards populist measures – instead of prudent policies to rebalance the economy – find it prohibitively expensive to short the lira. Every concludes that “unless the overnight swap rate falls back to the levels seen before the credit crunch, i.e. around 24%, any lira’s recovery should be taken with a pinch of salt.”

Well, that’s precisely what happened on Tuesday, when the Turkish lira’s overnight funding costs tumbled once again as it has become prohibitive difficult for the central bank to continue its vendetta against the shorts, with the rate plunging from over 300% to just over 18%, below levels seen during the credit crunch, and in fact below the central bank’s prevailing rate corridor.

Is The LYFT IPO The Inflection Point In The Ponzi?

Submitted by AdventuresInCapitalism.com,

Over the past few quarters, I have become increasingly critical of the Profitless Prosperity Sector, known amongst my friends as the Ponzi Sector.

Why Ponzi Sector?

Because these companies have no profits yet continue to raise new capital by showing explosive revenue growth. Oddly, the more revenue they show, the more money they lose, because incremental revenue is at a negative gross margin. Many of these companies are in consumer facing sectors where the product is not particularly unique. Rather, they are using a tech interface to offer an existing product and effectively subsidizing the consumer to use more of the product. Nothing shows this better than the ridesharing duopoly of Uber and Lyft (LYFT – USA). Therefore, last week’s LYFT IPO was enlightening.

To start with, $2.3 billion of stock was offered. While large for an IPO, it wasn’t particularly large in dollar value or in relationship to the overall purported equity value. Since the IPO, the shares have dropped like a rock without an uptick. As I write this, they’re still dropping and now 10% below the offering price.

Forget ‘Creepy’ – Biden Has A Major Ukraine Problem

Joe Biden appears to have made a major tactical error last year when he bragged to an audience of foreign policy experts how he threatened to hurl Ukraine into bankruptcy if their top prosecutor, General Viktor Shokin, wasn’t immediately fired, according to The Hill’s John Solomon.

One Bank Spots An Ominous Signal In The Record Performance Of Risk Parity Funds

As we discussed yesterday, one would have to search long and hard to find an asset that was down in the first quarter; one can thank the world’s central banks for that – in Q1 is when the world’s money printers finally threw in the towel on the brief if painful attempt to normalize global interest rates, strongly hinting that the next move will be rate cuts.

And nobody benefited more from this outperformance of both stocks and bonds in the first quarter than the investor class that is concurrently long both: balanced (60/40) funds in general and risk parity funds in particular.

As Bank of America Chintan Kotecha explains, the dichotomous interpretation of the Fed’s policy U-turn as a sign of economic weakness by the bond market but a return of the ‘central bank put’ by equities and other risk assets resulted in record performance for a hypothetical risk parity portfolio.

And while that’s great for such risk-parity billionaires as Ray Dalio and the biggest hedge fund (excluding central banks) in the world, Bridgewater, with more details to follow below, Bank of America spots an ominous warning in the record gains by risk parities in Q1, warning that this kind of outperformance tends to be a clear danger signal as “history suggests such strong simultaneous performance across asset classes cannot be sustained in the coming quarter.” In fact, in 8 out of 9 past periods since 1972 of strong risk parity performance, “subsequent performance was at or below median levels with an even stronger tendency to mean-revert post the global financial crisis.”

Here are the details: risk parity portfolio of equity, bond, and commodity indices, which broadly tracks the benchmark risk parity indices, would have just had its largest quarterly risk-adjusted return on rec …

Headline Durable Goods New Orders Declined in February 2019. Inflation Adjusted New Orders Are In Contraction.

Written by Steven Hansen

The headlines say the durable goods new orders declined. Our analysis shows the rolling averages continued its decline.

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This couple is one year away from having enough money to retire early — here’s what they did

How to get to financial independence.

Upgrade: The No. 1 airline in the world, according to travelers

Just one U.S. airline makes the top 10 list

Livability: This is how life changes when you move from the city to the country

One woman talks about leaving one of the most expensive cities in the U.S. to live a more simple life.