Author Archive for Zero Hedge

Italy’s 5 Star Threatens To Ditch Coalition Over Budget Talks, Italian Bonds Slide

Courtesy of ZeroHedge. View original post here.

While the market turmoil over Italy's budget has quieted down in recent weeks as a result of soothing words by the ruling coalition that it would comply with European demands, that snapped moments ago when DPA reported that the leader of Italy's Five Star Movement has threatened to pull the plug on the country's populist government if it cannot find money to implement election campaign promises.

"If we do not find the resources to do what we have said, then it is better for us to go home, there is no point in scraping by," M5S leader and Deputy Premier Luigi Di Maio told Radio 24.

As a result of budget limitations imposed by Brussels, the M5S and its coalition partner, the League, are struggling to find resources for three major pledges: cutting taxes, lowering the pension age and introducing basic income subsidies for the poor.

Di Maio's remarks piled pressure on Finance Minister Giovanni Tria, a technocrat who is resisting calls to increase the deficit because this could heighten the risk of a financial crisis.

"If we need a bit of deficit to improve the quality of life of Italians, we should remember that the priority is to improve the lives of Italians, not to reassure markets," Di Maio said. Risk indicators on Italy's sovereign bonds have surged in recent months, on the back of investors' fears of reckless public spending. Italy already has very high public debt.

As a reminder, the Italian government is supposed to set debt and deficit targets for next year by September 27, and to present detailed 2019 budget plans to the European Commission by October 15. Meanwhile, according to Wolfango Piccoli, an analyst at Teneo Intelligence consultancy, the M5S needs to score a political victory on the budget to make up for its declining popularity vis-a-vis the League.

In response to the news, Italian bonds fell with yields on 2Y bonds spiking.

Existing Home Sales At Lowest In 30 Months, Inventories Rise First Time In 3 Years

Courtesy of ZeroHedge. View original post here.

Following continued weakness in July, analysts once again hope for a rebound in home sales in August but once again they were disappointed. August existing home sales were unchanged from July's -0.7% drop, hovering at 5.34mm SAAR – the lowest since Feb 2016.

Expectations were for a 0.5% jump in August, but printed unchanged (home sales haven't seen a monthly increase since March)

Both single-family and multi-family units were unchanged in August as median prices dipped for the second month in a row (up 4.6% YoY still).

The West saw a 5.9% slump MoM in existing home sales as Northeast sales rose 7.6% MoM.

Inventory of available properties rose 2.7% y/y to 1.92m, which was the first increase in more than three years. At the current pace, it would take 4.3 months to sell the homes on the market, compared with 4.1 months a year earlier; Realtors group considers less than five months’ supply consistent with a tight market.

“While inventory continues to show modest year over year gains, it is still far from a healthy level and new home construction is not keeping up to satisfy demand,” said Yun.

“Homes continue to fly off the shelves with a majority of properties selling within a month, indicating that more inventory – especially moderately priced, entry-level homes – would propel sales.”

Hope is high for NAR however…

“There are buyers on the sidelines” ready to re-enter the market, Lawrence Yun, NAR’s chief economist, said at a press briefing accompanying the report.

“The housing market can turn for the better" as long as inventory continues to rise, he said.

And despite NAHB sentiment near cycle highs, homebuilder stocks and housing data continues to tumble…

Time for some rate-hikes, right?

“Rising interests rates along with high home prices and lack of inventory continues to push entry-level and first time home buyers out of the market,” said Yun.

“Realtors continue to report that the demand is there – that current renters want to become homeowners – but there simply are not enough properties available in their price range.”

“Multiple Victims” Reported In Maryland Shooting

Courtesy of ZeroHedge. View original post here.

Multiple people have been injured in a shooting in a business district in Aberdeen, Maryland. The attack occurred near the intersection of Spesutia Road and Perryman Road, according to the Harford County Sheriff's Office.

A church and a business park are near the area where the shooting was reported. It's not clear where the shooting took place.

Deputies were dispatched to the area – located roughly 30 miles from Baltimore – shortly after 9 am ET on Monday.

Police are asking people to avoid the area.

As RT points out, Harford County was the scene of a mass shooting in October 2017, when 37-year-old Radee Labeeb Prince shot and killed three of his co-workers and injured two more at a granite fabricator in the town of Edgewood. He was eventually captured after an hours long manhunt. 

This is a developing story. Check back for updates…

How The Next Downturn Will Surprise Us: Global Markets Have Grown ‘Too Big To Fail’

Courtesy of ZeroHedge. View original post here.

By Ruchir Sharma, op-ed via The New York Times


After the fall of Lehman Brothers 10 years ago, there was a public debate about how the leading American banks had grown “too big to fail.” But that debate overlooked the larger story, about how the global markets where stocks, bonds and other financial assets are traded had grown worrisomely large.

By the eve of the 2008 crisis, global financial markets dwarfed the global economy. Those markets had tripled over the previous three decades to 347 percent of the world’s gross economic output, driven up by easy money pouring out of central banks. That is one major reason that the ripple effects of Lehman’s fall were large enough to cause the worst downturn since the Great Depression.

Today the markets are even larger, having grown to 360 percent of global G.D.P., a record high. And financial authorities — trained to focus more on how markets respond to economic risk than on the risks that markets pose to the economy — have been inadvertently fueling this new threat.

Over the past decade, the world’s largest central banks — in the United States, Europe, China and Japan — have expanded their balance sheets from less than $5 trillion to more than $17 trillion in an effort to promote the recovery. Much of that newly printed money has found its way into the financial markets, where it often follows the path of least regulation.

Central bankers and other regulators have largely succeeded in containing the practice that caused disaster in 2008: risky mortgage lending by big banks. But with so much easy money sloshing around in global markets, new threats were bound to emerge — in places the regulators aren’t watching as closely.

Within the $290 trillion global financial markets, there are hundreds of new risks, pools of potentially troubled debt. Among the most troubling: corporate borrowers and so-called non-bank lenders all over the world.

* * *

Ruchir Sharma, the author of “The Rise and Fall of Nations: Forces of Change in the Post-Crisis World,”  is chief global strategist at Morgan Stanley Investment Management.

Dow Takes Out January Record Highs: “Congratulations USA!”

Courtesy of ZeroHedge. View original post here.

Thanks to investors buying the f**king trade tariff dip, The Dow Jones Industrial Average has finally taken out the January record highs…

Mission Accomplished…

The S&P 500 also pushed to new record highs…

And the president is paying attention…

S&P 500 HITS ALL-TIME HIGH Congratulations USA!

— Donald J. Trump (@realDonaldTrump) September 20, 2018

Just one thing…

Here Comes Round 2: Tilray Set For Another Insane Day After Huge Premarket Swings

Courtesy of ZeroHedge. View original post here.

Some have called it the "" mania and it was on full display yesterday with momentum frenzy stock du jour, Tilray, went absolutely berserk.

Bloomberg's Arie Shapira perhaps summarized the pot stock mania best, "with everyone and their mother either watching the madness unfold on their trading screens, trying to get a borrow to short the stock followed by relief that they never were able to short followed by wishing they were short all along, feeling major FOMO, or contemplating whether what they were witnessing was more like the crypto craze of last year, the freakouts from the rare earths (remember Molycorp?) to alternative energy and 3D printers at various points over the past 15 years, the dot com bubble, the tulip bulb crash of the 17th century, and so forth."

Stated less poetically, on Wednesday Tilray soared 94%, then wiped out the entire gain in under an hour, only to finish 40% higher than where it started, all in the span of 5 trading halts.

The fluctuations drew comparisons to the Bitcoin craze and the peak of the dot-com bubble. It also prompted many to ask the Fed if this was indicative of behavior of a market "without" asset bubbles.

Well, get ready for round two.

One day after Tilray took investors on "perhaps the wildest day yet for the nascent industry", the stock is set for another day of unprecedented volatility and mayhem, with huge swings in premarket trading falling as much as 7% before trading higher by 13% as more than 300,000 shares have already traded hands in the low-float stock, whose top shareholder owns ~70% of the shares outstanding.

Once again the pot euphoria is contagious, as Canopy Growth’s ADRs rose 3.1% while the ETFMG Alternative Harvest exchange-traded fund added 4.1% according to Bloomberg.

"When you get big moves like this, you suddenly have a lot of people paying attention,” said Matt Maley, an equity strategist at Miller Tabak & Co. "People are going to be watching a little closer and there probably will be more human involvement today than yesterday."

Which means that the violent moves…
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Initial Jobless Claims Plunge To Lowest Since The ’60s

Courtesy of ZeroHedge. View original post here.

The last time initial jobless claims were this low (1969), Abbey Road was #1 on the charts, and a recession broke out…

At 201k, initial claims are the lowest since 1969, and continuing claims are also plunging, to the lowest since 1973…

As good as it gets?

The Dollar Is Dumping As Bond Rout Spreads

Courtesy of ZeroHedge. View original post here.

The dollar index is collapsing this morning (helped by strength in cable and the loonie) as the global bond rout continues to spread…

The Bloomber Dollar Index has tumbled to its lowest since July 9th

Helped by a surge in Cable back at its highest since July 9th..

As UST bond yields resurge to new cycle highs…

And this time it's spreading to China, where yields no longer offer any kind of decoupling from US..

In fact some serious volumes are flying through the Treasury futures markets…

Turkish Lira Swings Violently As Erdogan’s Economic Plan Spooks Traders

Courtesy of ZeroHedge. View original post here.

The Turkish lira swung violently, rising to session highs then slumping 1.5% after Turkey presented its medium term economic plan, which together with last week's massive 625bps rate hike was supposed to restore investor confidence in the country's struggling economy.

The Turkish Lira first rose 1.9% during the speech delivered by Turkey's finance minister Berat Albayrak in which he revealed targets for growth and inflation that signaled a somewhat realistic assessment of the economy and its outlook, including a current account deficit that was forecast at 3.3% for 2019, a number seen as realistic and a far-cry from some of the wild estimates recently suggested by analysts.

Among the details, growth was seen slowing to 3.8% in 2018 and 2.3% in 2019, and according to Bloomberg, the slowdown is fueling speculation that authorities are not planning to stimulate the economy with outsized government spending. Additionally, the government's inflation target is 15.9% for 2019, dropping to 6% for 2021.

But the TRY then tumbled when he spoke about the plan for helping banks focused on restructuring debt, when one headline sent the currency sliding:


As Bloomberg added, Turkey will assess the financial structure and asset quality of banks and carry out financial health assessments; after studies, a comprehensive set of policies will be introduced “in light of global examples and Turkish past experience, which will help banking sector to further strengthen, real economy to have access to credit at affordable rates, while creating room for credit restructuring if needed."

Albayrak also said that the Ultimate objective for the real economy is to "restructure current credit debt and ensure the continuation of value-add production" and added that the Development Bank of Turkey will be restructured with an expanded mandate.

The statement prompted fears of more government intervention, seen most recently in Erdogan's threats over the central bank's tightening actions, and in kneejerk reaction the TRY quickly dumped to session lows.

Yet as Bloomberg's Stephen Kirland noes, for all that fluctuation, the options market was sending a calmer signal, with 3-month implied vols hardly budging from a one-month low, where it has been…
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World Stocks, 10Y Yields Rise As Trade Tensions Ease; Dollar Slides

Courtesy of ZeroHedge. View original post here.

World stocks and US equity futures continued to rise on Thursday in thin trade amid relief that the latest U.S. and Chinese tariffs on were less harsh than feared despite concerns about next steps in the US-Sino trade war, helped by a dollar which slid to 3 week lows even as Treasury yields approaching their highest level this year.

The MSCI World index rose 0.2%, supported by gains in Europe and Asia, but Chinese equities dipped back in the red after a strong 2-day rally on expectations of government stimulus to limit the economic damage of new trade barriers and after reports that Beijing was planning to cut the average tariff rate it charges on imports from the majority of its trading partners as soon as next month. Japan’s Nikkei ended little changed, barely moving after a well-anticipated win by Japanese Prime Minister Shinzo Abe in a ruling party leadership vote.

In Europe, the Stoxx Europe 600 Index rose 0.2% led by the auto sector with the Stoxx 600 Automobiles & Parts index rising over 1.0%, the best-performing sector on wider European stock gauge; the seventh consecutive increase marked its best winning streak since Nov. 2017. Kepler Cheuvreux strategists raised the recommended exposure to autos back to neutral from underweight as they "envisage a series of late-year bounces within Europe’s depressed value universe in segments that have been largely abandoned by investors."

In the US, S&P 500 E-mini futures were little changed following strong gains on Wall Street on Wednesday.

The yield on 10-year Treasuries, which on Wednesday touched its highest level since May 18, rose to 3.07% ahead of what is expected to be a hawkish Fed meeting next week.

The greenback remained weaker after a report said the U.S. and Canada are unlikely to reach a deal on Nafta in Washington this week, while the pound strengthened after August retail sales came in higher than expected.

In an otherwise quiet session, Markets watched the ongoing European Union summit where PM Theresa May appealed to fellow EU leaders on Wednesday to drop Brexit demands that she said could rip Britain apart.

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Phil's Favorites

Why tech giants have little to lose (and lots to win) from new EU copyright law


Why tech giants have little to lose (and lots to win) from new EU copyright law

Copyright, and copyright laws, will not always match expectations. inkninja, CC BY

Courtesy of Maurizio Borghi, Bournemouth University

The new European Union Copyright Directive, passed recently by the European parliament after a ...

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Kimble Charting Solutions

King Dollar Created Multi-Year Topping Pattern?

Courtesy of Chris Kimble.

The currency markets often play a role in asset management for investors. And one key asset that pays close attention to the US Dollar is Gold (and precious metals). Could a near-term trend change be in store for the US Dollar… and its counterpart, the Euro? Precious metals bulls would love to see the US Dollar topping and the Euro bottoming.

In the chart below, you can see that the two currencies are showing similar reversal patterns – a traditional head and shoulders top for the US Dollar Index and an inverted head and shoulders bottom for the Euro.

BUT, they need to confirm these pattern by breaking down / up.

It’s worth noting that NOTHING has been proved so far, but the potential of both creating longer-term reversal patterns is there and traders should stay tuned.

US D...

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Zero Hedge

Italy's 5 Star Threatens To Ditch Coalition Over Budget Talks, Italian Bonds Slide

Courtesy of ZeroHedge. View original post here.

While the market turmoil over Italy's budget has quieted down in recent weeks as a result of soothing words by the ruling coalition that it would comply with European demands, that snapped moments ago when DPA reported that the leader of Italy's Five Star Movement has threatened to pull the plug on the country's populist government if it cannot find money to implement election campaign promises.

"If we do not find the resources to do what we have said, then it is better for us to go home, there is no point in...

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How Soon Will A.I. Replace All The Traders: Q&A With Gaurav Chakravorty, CIO Of Qplum

By Jacob Wolinsky. Originally published at ValueWalk.

VW: Tell our readers, what is Qplum?

Qplum is an AI-driven investment management firm. We manage money for individuals, families, and institutions. We actively manage investments using machine learning and deep learning technology.

Our three product lines are:

  1. Wealth, servicing the financial needs of individuals and families via separately managed accounts.
  2. Alpha, for institutional clients only, where we offer different products like GTAA (Global Tactical Asset Allocation), managed futures program, etc. and
  3. Solutions, where we work on customized tactical asset allocation solutions for pension funds and family offices to target a dual loss-aversion and return-seeking investment mandate.



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Insider Scoop

Morgan Stanley Bullish On Amazon's New Automated Stores

Courtesy of Benzinga.

Related AMZN Stitch Fix Falls After Piper Jaffray Downgrade; Analyst Says 'Smallest Hint Of Pressure' Could Threaten Valuation ... more from Insider

Digital Currencies

Mania to Mania


Mania to Mania

Courtesy of 

“Russell rarely played the stock market and had little investing experience when he put around $120,000 into bitcoin in November 2017.”

This comes from a CNN money article, Bitcoin crash: This man lost his savings when cryptocurrencies plunged. From January 2017 through the peak in early 2018, Ethereum gained 16,915%.

Any time you have something go vertical, you just know that some peopl...

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Chart School

Weekly Market Recap Sep 16, 2018

Courtesy of Blain.

Slow and steady drip up all this past week in a very quiet news environment.  A gap down top open the day Tuesday (which was recovered quickly) and a gap up Thursday (which held) were the highlights!

The latest on TRADE WARS!(tm):

Tuesday, news hit that China vowed to retaliate and plans to ask the World Trade Organization next week for permission to impose sanctions on the U.S. for Washington’s noncompliance with a ruling in a dispute over U.S. dumping duties, Reuters reported. That’s part of a dispute that goes back to 2013.

“Trade wars are certainly a concern, but I don’t know that they’re a one...

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Members' Corner

Nike, Colin Kaepernick and the pitfalls of 'woke' corporate branding


Adding this article to Members Corner, in case anyone wants to share their opinions on Nike and Kaep, or on divisiveness in general. Also see the article I mentioned in the comments section, "A Warning From Europe: The Worst Is Yet to Come" and What’s behind the current wave of ‘corporate activism’? ~ Ilene

Nike, Colin Kaepernick and the pitfalls of 'woke' corporate branding

Courtesy of Simon Chadwick, University of Salford...

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Gene-editing technique CRISPR identifies dangerous breast cancer mutations

Reminder: Pharmboy is available to chat with Members, comments are found below each post.


Gene-editing technique CRISPR identifies dangerous breast cancer mutations

Breast cancer type 1 (BRCA1) is a human tumor suppressor gene, found in all humans. Its protein, also called by the synonym BRCA1, is responsible for repairing DNA. ibreakstock/

By Jay Shendure, University of Washington; Greg Findlay, ...

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Mapping The Market

Mistakes were Made. (And, Yes, by Me.)

Via Jean-Luc:

Famed investor reflecting on his mistakes:

Mistakes were Made. (And, Yes, by Me.)

One that stands out for me:

Instead of focusing on how value factors in general did in identifying attractive stocks, I rushed to proclaim price-to-sales the winner. That was, until it wasn’t. I guess there’s a reason for the proclamation “The king is dead, long live the king” when a monarchy changes hands. As we continued to update the book, price-to-sales was no longer the “best” single value factor, replaced by others, depending upon the time frames examined. I had also become a lot more sophisticated in my analysis—thanks to criticism of my earlier work—and realized that everything, including factors, moves in and out of favor, depending upon the market environment. I also realized...

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Swing trading portfolio - week of September 11th, 2017

Reminder: OpTrader is available to chat with Members, comments are found below each post.


This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current  trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here ...

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Free eBook - "My Top Strategies for 2017"



Here's a free ebook for you to check out! 

Phil has a chapter in a newly-released eBook that we think you’ll enjoy.

In My Top Strategies for 2017, Phil's chapter is Secret Santa’s Inflation Hedges for 2017.

This chapter isn’t about risk or leverage. Phil present a few smart, practical ideas you can use as a hedge against inflation as well as hedging strategies designed to assist you in staying ahead of the markets.

Some other great content in this free eBook includes:


·       How 2017 Will Affect Oil, the US Dollar and the European Union


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All About Trends

Mid-Day Update

Reminder: Harlan is available to chat with Members, comments are found below each post.

Click here for the full report.

To learn more, sign up for David's free newsletter and receive the free report from All About Trends - "How To Outperform 90% Of Wall Street With Just $500 A Week." Tell David PSW sent you. - Ilene...

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About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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About Ilene:

Ilene is editor and affiliate program coordinator for PSW. She manages the site market shadows, archives, more. Contact Ilene to learn about our affiliate and content sharing programs.

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