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  • Finance 0

    10Y Spikes Over 3.00% Or Copper Crashes – What Happens Next?

    The spread between 10Y Treasury yields and the ratio of copper-to-gold has never been wider as the former signals recessionary economics (flattest curve since 2007) and the latter reflationary recovery (highest in 3 years)… so who is right? Bond yields are sliding as Gundlach’s favorite signal (copper/gold) soars… implying 10Y over 3.01% (75bps higher than the current level!)   In fact, the gold-to-copper ratio is on the cusp of dipping beneath four for the first time since November 2014.   As Bloomberg comments, that’s a good sign for the global economy. Rising prices of copper indicate a pick-up in industrial produ...
    On October 16, 2017 / By
  • Finance 0

    GBP/USD Falls To Support As May’s Brussels Trip Looks Unfruitful

    PM Theresa May made a trip to Brussels on a short notice. So far, it seems that this trip is not yielding any fruits. GBP/USD is falling to support at 1.3230. Further support awaits only at 1.3110. Resistance is at 1.3340. May, alongside Brexit minister David Davis, flew to the Belgian capital to meet with Jean-Claude Juncker and Michel Barnier, the chief EU negotiator. This high-level meeting was supposed to break the deadlock that talks have reached last week. Later this week, EU leaders will convene and assess if enough progress has been made in order to proceed to the second phase of talks: the future arrangements after Britain leaves. C...
    On October 16, 2017 / By
  • Finance 0

    BlackBerry In Focus As Patent Licensing Director Exits

    Shares of BlackBerry (BB)(BBRY) are in focus after a senior executive is said to have left the company, marking the second high-level departure in the last three weeks. EXECUTIVE DEPARTURES: Victor Schubert, a key attorney executing BlackBerry’s patent licensing strategy told Reuters in a LinkedIn message that he is no longer with the company. Schubert joined BlackBerry in March 2015. Schubert’s exit follows the departure of Mark Kokes, the head of BlackBerry’s patent monetization strategy who left earlier this month to join health technology firm NantWorks, which houses startups focused on global health information and next...
    On October 16, 2017 / By
  • Finance 0

    Playing The Part In NAFTA Negotiations

    As the fourth round of NAFTA negotiations comes to an end, the agreement’s survival has once again been brought into question. US President Donald Trump has threatened to strike a new deal with just Canada. Mexico downplayed the threat, saying it would walk away from negotiations if the new terms brought by the US put it at a disadvantage. For their part, the Canadians have been quiet, keeping their cards much closer to their chests. All this commotion belies the fact that no NAFTA member is likely to walk away from the deal. The economic realities and commercial interests that led to its formation in the first place still incentivize coope...
    On October 16, 2017 / By
  • Finance 0

    China And Reflation

    Chinese PPI inflation picked up further in September, accelerating to 6.9% (6.3% previous, and consensus). It forms part of a trend that we have seen in China towards higher generalized inflation. We’re also seeing PPI inflation accelerating in the less commodity driven sectors, so it’s not entirely a commodity story. Likewise, non-food CPI inflation has been running at a solid pace in recent months, and echoes the trends seen in PPI and property price inflation. The GDP deflator has also rebounded notably (next reading of this later this week), which makes for better nominal growth outcomes, and this ties into the next part of ...
    On October 16, 2017 / By
  • Finance 0

    Aluminum Is The Surprise Bull Market Of The Year

    Unlike base metals like zinc or copper, there isn’t a supply problem with aluminum, per se. That is, aluminum is a plentiful metal. Bauxite, aluminum ore, is the primary source of aluminum. It’s nearly all that remains when you weather granite mountains into clay. Bauxite is common in the tropics. According to the U.S. Geological Survey, there are between 55 billion to 75 billion tons of bauxite resources around the world. Countries like Guinea, Australia, Vietnam, Jamaica, and Brazil hold the most mineable reserves. Aluminum prices hit a record low in November 2015. At $0.65 per pound, aluminum was the cheapest since the crash in 2008...
    On October 16, 2017 / By
  • Finance 0

    What Do The Bulls Have Here?

    Any kind of strength whether it is by a gap higher or intraday rally, immediately gets sold off.  We’ve seen it almost every day now over the last seven trading sessions.  Throughout the past week, I was adding and subtracting positions. I was booking profits in Nvidia (NVDA) for 4%, and Olin Corp (OLN) for 5.2%, while adding new positions like Ferrari (RACE) and Lam Research (LRCX). But now, today at least, I am a bit cautious about wanting to add new trades to the portfolio, and may even consider booking some of the profits currently in LRCX before they report on Tuesday.  I’m at a point here where, okay, the market...
    On October 16, 2017 / By
  • Finance 0

    NAFTA Worries Take Toll, Yellen’s Best Guess Supports Greenback

    In a relatively quiet week for economic data, except for the UK, we suggested that politics may trump economics. Today, the Canadian dollar is the weakest of the major currencies, losing about 0.5%, while the Mexican peso is the poorest performer among emerging market currencies, losing closer to 1%. The move began last week. Over the past five sessions, the Mexican peso is the weakest currency in the world, losing 2.2% against the US dollar. The Canadian dollar is up 0.1% over the past five sessions that make it the worst of the major currencies.   The key consideration is NAFTA negotiations. Recall that US President Trump initially thre...
    On October 16, 2017 / By
  • Finance 0

    Richard Sylla: 70% To 80% Chance Of Another Global Financial Crisis

    When Janet Yellen, Chairman of the US Federal Reserve, said in June that she does not expect another financial crisis in our lifetime, eyebrows were raised. None more so than Richard Sylla’s. Sylla, a professor emeritus at the Stern School of Business and co-author with Sydney Homer of the magisterial A History of Interest Rates, has studied past business cycles. He is thus able to put today’s events in a broader context.  “A lot of the same things are going on right now as before the 2008 crisis,” said Sylla, who puts the probability of a repeat, in our lifetimes, at between 70% and 80%. “People figure that central banks avoided...
    On October 16, 2017 / By
  • Finance 0

    Morgan Stanley Says Sell Omnicom As ‘New Normal’ Not Good For Ad Agencies

    Shares of Omnicom (OMC) are sliding after Morgan Stanley analyst Benjamin Swinburne downgraded the stock to Underweight, the firm’s equivalent to a sell rating, as he contends that “lower for longer is the new normal” for advertising agencies. The analyst also cut his price target on peer Interpublic Group (IPG), while nothing he disagrees with the consensus view that organic growth will return for the industry in 2018.   SELL OMNICOM: In a research note to investors this morning, Morgan Stanley’s Swinburne downgraded Omnicom to Underweight from Equal Weight and lowered his price target on the shares to $72 from $86. ...
    On October 16, 2017 / By