Comment by phil

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phil
October 31st, 2014 at 5:34 am

Good morning and WTF????

Futures are up 1% thanks to BOJ raising their asset purchase target to 80 TRILLION YEN – TRIPLING their purchases of stock and property funds.  WTF???

• BOJ Unexpectedly Eases Policy
  

  The Bank of Japan on Friday unexpectedly announced additional stimulus measures, bolstering its asset purchases for the first time in over a year and a half, as its 2% inflation target looks increasingly untenable.

  • Japan’s Inflation, Job Creation Slowdown a Blow to Abenomics

• Careful What You Wish For: Plunging Yen Leads To 140% Surge In Bankruptcies
  

• The Kuroda Bazooka Round Two
  

Japan’s Inflation, Job Creation Slowdown a Blow to Abenomics. Japan’s inflation rate fell to its lowest in nearly a year and a measure of job creation worsened for the first time in more than three years, highlighting the divergence between developments in the economy and policy makers’ optimistic projections.

• Sony Posts Hefty Loss
  

  Sony reports a $1.2 billion loss for the quarter after writing down the book value of its struggling smartphone business. 3:35 AM

  • Sony Replaces Mobile Division Head

That announcement shot the Nikkei up 5%, yes 5% (there should be a rule about that) in a single session!  That's 16,665 on /NK – the mark of the Blankfein!  All I can say is WOW!  Also, what a great example of how you should never leave Futures trades overnight (or unattended) as this move came so quick – there was no way out.  

Tempting though it may be to knee-jerk go short here (17,227, 2,007, 4,141 and 1,163) – those moves are coming against a Dollar that just flew up to 86.70 (0.5%) so best to stick to our plan and stay neutral for the moment.  

Perhaps we will have an opportunity to buy out some SQQQ or DXD short callers to lean a bit more bearish into the weekend – we'll have to see.  

It's now 110 Yen to the Dollar so 80Tn Yen ain't what it used to be ($727) and it's "only" a $15Tn Yen ($136Bn) increase from their previous target but all the papers are headlining 80Tn and that is just a stunning-looking amount of money – especially with the huge boost towards the markets and not bonds.  On the whole, they raised the stock-buying portion of the 80Tn from 8% to 25% so the real impact to stocks is 17% of $727Bn or $124Bn so, essentially, the entirety of the boost is directed at the market.  

So, if you are caught too short, not much to do but ride it out.   This is like a huge wave hitting your ship, unless you are very unbalanced, you may tilt but hopefully you won't capsize and this too shall pass.  

Along with Japan's 5% pop (and they closed there so maybe more to come on Monday), the rest of Asia was up 1.25%

Oil, meanwhile, dove to $80.50 on the strong Dollar with gold $1,175, silver $16.05 (and  I like a long on /SI off the $16 line with tight stops below), copper $3.08, nat gas $3.88 and gasoline also diving to $2.14 and I like /RB long over that line too.  See, there's always something to play…

Friday's economic calendar

• 8:30 Personal Income and Outlays
• 8:30 Employment Cost Index
• 9:45 Chicago PMI
• 9:55 Reuters/UofM Consumer Sentiment
• 3:00 PM USDA Ag. Prices

Another stock exchange glitch, but no trading halt

Fed Exit Could Spark Slump in All Markets, ATP CEO Says. The head of Denmark’s biggest pension fund says his main concern now is how to ride out what may turn into a simultaneous slump across asset classes as central bank liquidity is withdrawn.

Jim Grant On Complexity: The Hidden Cost Of Central Bank Actions

Goldman(GS) Warns Midterm Elections Raise Risk Around Fiscal Deadlines

Cash-Strapped Americans Are An Ominous Threat To Retailers

Shadow Banking Assets Increase By $5 Trillion To Record $75 Trillion, 120% Of Global GDP

US-based stock funds attract $8.8 bln over week, all in ETFs

Big Banks Brace for Penalties in Probes. Citi Restates Earnings as It and Other Lenders Reserve Cash for Deal in Forex Investigation. Big banks in the U.S. and Europe are stockpiling billions to pay for a potential trans-Atlantic settlement of allegations that they manipulated foreign-exchange rates as talks heat up with regulators on both continents.

Algos Please Ignore: Citi(C) Slashes Previously Reported Net Income Due To "Legal Investigations" Over FX Rigging Probe

OPEC Boosts Oil Output as Prices Slide to Four-Year Low. OPEC countries boosted oil output to a 14-month high in October as crude futures sank into a bear market, a Bloomberg survey showed yesterday. Production by the 12-member Organization of Petroleum Exporting Countries climbed by 53,000 barrels a day to 30.974 million, led by gains in Iraq, Saudi Arabia and Libya, according to the survey of oil companies, producers and analysts. Last month’s total was revised 14,000 barrels a day lower to 30.921 million because of changes to the Iraqi, Kuwaiti, Nigerian and Qatari estimates.

Emerging-Market Currencies Hurt by Oil, Metals: Chart of the Day

ConocoPhillips(COP) Becomes First to Cut Spending on Lower Oil. ConocoPhillips became the first major oil company to announce plans to reduce spending due to falling crude prices as drilling in some emerging North American fields becomes less profitable. The third-largest U.S. energy producer can meet its target to boost production by as much as 5 percent a year even as it reduces annual spending to below $16 billion, Chairman and Chief Executive Officer Ryan Lance told investors today. U.S. oil prices have declined 24 percent from a high of $107.26 a barrel in June because of increased North American supplies and reduced global demand forecasts.

Iron ore price forecast to fall to $US75/tonne. Analysts at research house Morningstar have become the latest to significantly lower their iron ore forecasts with more pain to come for local miners.

Starbucks(SBUX) Tumbles After Reporting Weak Earnings

LinkedIn(LNKD) revenue jumps 45 pct as companies hire more. Corporate networking site LinkedIn Corp reported a 45 percent rise in quarterly revenue as more businesses used its services to hire staff.

GOPRO(GPRO) SHARES SPIKE AFTER EARNINGS BEAT

Obamacare Faces New Threat as Supreme Court Weighs Appeal. The fate of President Barack Obama’s health-care law is again in the hands of the U.S. Supreme Court. Two years after upholding the law by a single vote, the justices are weighing whether to hear a Republican-backed appeal that would block people in 36 states from getting tax subsidies to buy insurance. The justices are scheduled to discuss the matter tomorrow, with an announcement coming as soon as Nov. 3. ?

Chinese Authorities Are Shocked By The Results Of The Relaxed 'One Child' Policy. Far fewer Chinese couples applied to have a second child than expected after a relaxation of the country's "one child" policy, state-run media reported Thursday, highlighting the ageing nation's demographic challenges.

Merkel Downplays Incursions as Russia Probes NATO Defense. German Chancellor Angela Merkel played down the significance of incursions by Russian jets as Vladimir Putin probed Europe’s air defenses for a third day. “In the last few months I’ve seen very robust exercises with the Russian army, but I’m not acutely concerned about grave airspace violations,” Merkel said at a press conference in Berlin yesterday. Allied jets tracked Russian fighter aircraft along Europe’s fringes, bringing the number of interceptions so far in 2014 to 100, three times last year’s total, the North Atlantic Treaty Organization said in a statement.

Russia Weaponizes The Arctic: Will Build 13 Airfields And 10 Radar Stations To Meet "Unwelcome Guests"

Russia Agrees to Terms With Ukraine Over Gas Supply. Russia agreed to terms for restoring natural-gas exports to Ukraine, laying the groundwork to prevent residents going without heat as temperatures drop. The gas negotiations, brokered by the European Union, came as pro-Russian rebels stepped up attacks on Kiev government forces. European leaders said they hoped the deal would help improve ties between the two countries. 

Poland Is Preparing For A Potential Russian Invasion

 

Russia Seen Raising Rates as Ruble Plunge Feeds Inflation. Russia’s central bank will probably increase its benchmark interest rate for the fourth time this year, bringing it to the highest level since it was introduced 13 months ago, to halt a currency run that’s stoking inflation. The Bank of Russia will raise its key rate to 8.5 percent from 8 percent, according to 22 of 31 economists surveyed by Bloomberg. Two predict a move to 9 percent, with increases of a quarter-point and 75 basis points forecast by one analyst each. Five economists see no change. The central bank will announce its decision at about 1:30 p.m. in Moscow today. ?

Here's a great photo for those of you who don't believe in evolution:



98% genetic match to humans!