18Aug2021 Market Close: Fed’s Taper Talk Tanks The Dollar, Oil, And Bond Yields While Stocks Puke, DOW Closes Down 383 Points, Nasdaq Down 0.9%, WTI Crude Slides To 64.63

Is The U.S. Shale Bankruptcy Rout Over?

Back in April, we reported that U.S. oil and gas companies were still filing for bankruptcy at record levels right in the midst of an oil price recovery. Smaller producers were the main victims as a total of eight North American oil and gas producers with an aggregate debt of $1.8B filed for bankruptcy protection in Q1 2021. But it now appears that the massive wave of bankruptcies has finally abated. According to Energy and restructuring law firm Haynes and Boone, just four U.S. exploration and production (E&P) companies filed for Chapter 11

Peter Thiels Tech Firm Just Bought $50 Million In Gold Bars

Anyone watching Tuesday’s US market cash session sees red across the board. One of the strongest sell programs in months dumped stocks at the start of trading on Tuesday, and equity volatility spiked to the upside. As Nomura warned looking the arcane gamma topology underpinning the market, this could be the beginning of a market storm. And ahead of what could be further market turmoil, Palantir Technologies warned about an upcoming “black swan event,” according to Bloomberg. The software company, co-founded by the technology billionaire Peter Thiel

Chinas Oil Product Exports Plunge As Quotas Are Slashed

Chinese exports of gasoline and diesel plunged in July compared to June, after China slashed the quotas of authorized exports of refined petroleum products, according to data from the General Administration of Customs quoted by Reuters on Wednesday. Chinese exports of gasoline, diesel, and jet fuel are expected to drop off significantly for the rest of the year because of the slashed quotas, analysts say. In July, Chinas diesel exports slumped by 41 percent, and gasoline exports plummeted by 49 percent as refiners ran out of export quotas

U.S. Politics Are Weighing On Canadas Oil Industry

Alberta is taking hit after hit following the cancellation of the Keystone pipeline and international pressure to curb oil production in the coming years, as the oil-rich state insists it needs to maintain its thriving oil industry to survive. First, it was the cancellation of a huge oil infrastructure project, the $8 billion, 1,700-mile Keystone XL pipeline expansion, that was supposed to run from Alberta to Nebraska, carrying an estimated daily average of 800,000 bpd of oil. The project had gone back and forth, initially being canceled

The Global Shipping Market Is Looking Increasingly Fragile

The global shipping market has been a depressing topic to report on this year. We have posted two or three updates on the state of play over the last eight months, each time expecting the situation to improve. Depressingly, by the time we come back to it, it has, if anything, gotten worse. Rising shipping rates Freight rates have soared since the beginning of the year. Port congestion has increased and container availability has decreased. Shipping line shutouts have become a common feature. Bloomberg reported that China has partly shut the worlds

Are Americas Electric Vehicle Targets Too Ambitious?

Sales of electric vehicles in the United States more than doubled in the first half of 2021 compared to the same period last year, when lockdowns had hit car sales everywhere in the world. Still, the jump in EV sales is good news for the current American administration, which wants 50 percent of all new vehicles sold in the United States in 2030 to be zero-emission vehicles. The rise in EV registrations is also good news for both Tesla and the legacy automakers vying for a share of the zero-emission vehicle pie. Despite the surge in

U.S. to require nursing homes get staff fully vaccinated or lose federal funding

The federal government will tell nursing homes they must get their staff fully vaccinated against Covid-19 as a requirement for receiving U.S. funding.

Aston Martin Chairman Stroll on luxury automaker’s turnaround plan: ‘The risks are behind us’

Canadian billionaire Lawrence Stroll said he’s confident his turnaround plan for Aston Martin is paying off.

NHL jersey patch, NBA virtual ads will clutter sports sponsorships in 2023

U.S. sports leagues are offering make-goods with new inventory but experts suggest it will lead to a crowded sponsorship space in 2023.

Restaurants sue New York City, De Blasio for indoor dining vaccination mandate

Mayor Bill de Blasio is facing his first lawsuit from restaurants for the executive order requiring proof of vaccination to dine indoors.

Classic car insurer Hagerty to go public via SPAC in $3 billion deal with Aldel Financial

Classic car insurance company Hagerty is going public via a special purpose acquisition company, in a deal valued at more than $3 billion.

Apple backs Biden’s proposal to eliminate greenhouse gases from power plants by 2035

Apple VP of environment Lisa Jackson said she expects to discuss Biden’s infrastructure bill at a meeting on Apple’s campus with EPA head Michael Regan.

U.S. will begin wide distribution of Covid booster shots next month, saying vaccine protection wanes over time

U.S. agencies are preparing to offer booster shots to all eligible Americans beginning the week of Sept. 20.

The toughest carbon emissions for companies to capture have climate experts worried

As corporations set net-zero carbon goals, getting there means tackling Scope 3 emissions, and progress on that challenge has climate experts worried.

BMW secures funding for EV battery aiming to rival range of a traditional engine

Project is one of four to receive funding via the Advanced Propulsion Centre Collaborative Research and Development competition.

Southwest Airlines offers staff referral bonuses worth $300 as carrier struggles to fill jobs

Southwest Airlines says it is having trouble hiring staff because of the tight labor market.

Target CEO Brian Cornell quells fears about out-of-stocks this holiday season

Target CEO Brian Cornell is confident the big-box retailer will have plenty of merchandise this holiday season, despite industrywide supply chain obstacles.

The need for trip insurance amid the pandemic is reshaping the travel landscape

The wisdom of acquiring comprehensive travel insurance with coverage for medical costs associated with Covid-19 is reshaping the travel landscape, insurers say.

Fed’s Taper Talk Tanks The Dollar, Oil, & Bond Yields; Stocks Puke

Fed’s Taper Talk Tanks The Dollar, Oil, & Bond Yields; Stocks Puke

The Fed appeared to hint at tapering its massive bond-buying bonanza and markets went a little bit turbo. Gold and bonds rallied notably while the dollar dropped and stocks had no bloody idea what to do, so they collapsed…

US equity markets shifted into chaos mode – despite all the gamma-squeeze ammo still available ahead of Friday’s opex – whipsawed around significantly before puking lower in the last hour to close down around 1%…

30x Levered Hedge Fund That Got Steamrolled On Treasury Basis Trade Launching Its Own Repo Dealer

30x Levered Hedge Fund That Got Steamrolled On Treasury Basis Trade Launching Its Own Repo Dealer

By now most are aware that when the Fed first launched “NOT QE” in September 2019 to inject liquidity into the market, what it was really doing was bailing out dozens of hedge funds engaging in highly levered trades involving a relative value compression trade in the Treasury cash/swap basis… almost identical to what LTCM was doing ahead of its 1998 bailout (see “The Fed Was Suddenly Facing Multiple LTCMs”).

A similar hedge fund bailout occurred in March 2020 when amid the covid lockdown crash, treasury trades went haywire, and crushed many of the same hedge funds that had clearly not learned their lesson just 6 months earlier. The resulting bloodbath was among the reasons the Fed was forced to inject trillions in liquidity via overnight repo facilities.

One of the funds that got hammered especially hard by the dislocation in treasury basis trades was Capula Investment Management’s Global Relative Value Fund which dropped 5.2%, only to rebound sharply once the Fed flooded the system with funds restoring normality to the popular hedge fund trade.

The unspoken message among all the market turmoil was that hedge funds had joined the ranks of Bank Holding Companies as entities that are, in the eyes of the Fed, too big to fail, and any existential threat to their P&L would be met with further aggressive liquidity injections.

White House On Defensive Over Chinese Reports That US Prepared To ‘Abandon’ Taiwan Too

White House On Defensive Over Chinese Reports That US Prepared To ‘Abandon’ Taiwan Too

At a moment China’s military is holding extensive drills that include submarines, aircraft, and warship maneuvers near Taiwan – and as the world beholds this week’s chaos unfold in the wake of a botched US evacuation from Kabul – the White House has been prompted by shaken allies in Taipei to address its “commitments” in the region.Â

A Tuesday statement vowing unwavering support to Taiwan’s autonomy and democracy also comes as Chinese state media and officials essentially gloat over America’s Afghan failure and subsequent retreat. “We believe that our commitments to our allies and partners are sacrosanct and always have been,” National Security Advisor Jake Sullivan told a press briefing.

Via AP

Fed Says May Have To Raise Reverse Repo Limits

Fed Says May Have To Raise Reverse Repo Limits

With the Fed’s reverse repo facility hitting a new all time high today, rising to a record $1.116 trillion among 82 counterparties…

… the manager of the Federal Reserve’s open market operations, Lorie Logan, was quoted in the FOMC minutes as saying that “market participants were beginning to focus on the potential effects of changes in the Treasury General Account at the Federal Reserve and Treasury bill issuance over coming months in connection with the debt ceiling.” She then said that “if a number of counterparties reached the per-counterparty limit on their ON RRP investments and downward pressure on overnight rates emerged, it may become appropriate to lift the limit.”

As a reminder, the current limit is $80 billion per counterparty (rev repo usage is focused among a handful of accounts), which was raised from $30 billion in mid-March. While the average use assuming the total facility usage currently is spread evenly across the 82 counterparties is a relatively benign $13.6 billion, the fact that the Fed is …

Taliban will not be able to access most Afghan central bank assets

Most of the country’s financial reserves are held in the US where the Taliban will not be able to access them.

40 million T-Mobile customers hit by US data breach

More than 40 million T-Mobile customers have been hit by a US data breach.

Northern English regions drive house price growth

Wales also records rapid rises as the UK sees property prices go up at the fastest rate for 17 years.

Are the Indian stock markets closed on Thursday?

Equity, currency and derivatives markets will be closed for trading on Thursday, August 19 as the Street and the nation will observe Muharram.

Fed minutes show most officials see inflation goal in hand

œMost participants judged that the Committee’s standard of ‘substantial further progress’ toward the maximum-employment goal had not yet been met, minutes of the Federal Open Market Committee’s July 27-28 gathering released in Washington Wednesday said.

CDSL’s subsidiary recognized as bullion depository at IFSC

CDSL IFSC received recognition from the IFSC regulatory authority and can now provide various functions such as holding and transfer of bullion like gold.

28 July 2021 FOMC Meeting Minutes: Seems Like The Fed Is Saying Asset Tapering Will Be Sooner Rather Than Later

— this post authored by Steven Hansen

The 28 July 2021 meeting statement presented the actions taken. This post covers the economic discussion during this FOMC meeting between the members. An interesting quote:

… Many participants remarked upon risk-management considerations when contemplating how and when to make changes to the Committee’s pace of asset purchases. Some participants suggested that it would be prudent for the Committee to prepare for starting to reduce its pace of asset purchases relatively soon, in light of the risk that the recent high inflation readings could prove to be more persistent than they had anticipated and because an earlier start to reducing asset purchases would most likely enable additions to securities holdings to be concluded before the Committee judged it appropriate to raise the federal funds rate. …

The Fed: MarketWatch Interview: Fed’s Bullard says delta COVID variant won’t derail economy

St. Louis Fed President James Bullard told MarketWatch on Wednesday that the spread of the delta variant won’t slow down the economy.

: ‘Most’ top Fed officials backed taper to start this year, minutes of July meeting show

Most of the 19 top Federal Reserve officials said last month that they thought it would be appropriate to start reducing the pace of its asset purchases this year.

FA Center: Your stock fund’s poor return could be because the manager is clueless about when to sell

When you buy stocks doesn’t matter — it’s when you sell that counts.