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CHART OF THE DAY: Post-NIRP, European & Japanese Stocks Still Crashing

Editor's Note: Below is a brief excerpt and chart from today's Early Look written by Hedgeye Director Darius Dale. Click here to learn more.

 

"... In light of all the above, it’s easy to see why European and Japanese capital markets are imploding. The EuroStoxx 600 Index and TOPIX Index have crashed -20.7% and -25% from their respective 52-week closing price highs. Bank stocks are feeling the brunt of the pain amid NIRP-fueled scrutiny of their business models. Specifically, the EuroStoxx Banks Index has crashed -24.6% YTD, while the TOPIX Banks Index has crashed -22.6% from the BoJ’s 1/29 announcement of NIRP."

 

CHART OF THE DAY: Post-NIRP, European & Japanese Stocks Still Crashing - 4 6 Chart of the Day


[UNLOCKED] Keith's Daily Trading Ranges

We've made some new enhancements to Daily Trading Ranges - our proprietary buy and sell levels on major markets, commodities and currencies sent to subscribers weekday mornings by CEO Keith McCullough. Click here to view a brief video of McCullough explaining how to use it most effectively.

 

Subscribers now receive risk ranges for 20 tickers each day -  the last five of which are determined by what's flashing on Keith's screen and by what names subscribers are asking about. Click here to subscribe.

 

  • Bullish Trend
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INDEX BUY TRADE SELL TRADE PREV. CLOSE
UST10Y
10-Year U.S. Treasury Yield
1.83 1.70 1.73
SPX
S&P 500
2,020 2,077 2,045
RUT
Russell 2000
1,066 1,130 1,095
COMPQ
NASDAQ Composite
4,737 4,933 4,843
NIKK
Nikkei 225 Index
15,590 16,640 15,723
DAX
German DAX Composite
9,508 9,798 9,563
VIX
Volatility Index
13.01 19.38 15.42
USD
U.S. Dollar Index
94.01 95.99 94.64
EURUSD
Euro
1.11 1.14 1.14
USDJPY
Japanese Yen
110.19 112.95 110.29
WTIC
Light Crude Oil Spot Price
35.09 38.12 36.56
NATGAS
Natural Gas Spot Price
1.84 2.05 1.94
GOLD
Gold Spot Price
1,206 1,245 1,232
COPPER
Copper Spot Price
2.10 2.23 2.14
AAPL
Apple Inc.
104 112 109
AMZN
Amazon.com Inc.
560 609 586
MCD
McDonald's Inc.
122 128 127
XLU
Utilities Select Sector SPDR
48.06 50.13 48.67
TSLA
Tesla Motors Inc.
219 257 255
GM
General Motors Co.
29.15 30.99 29.60


Cartoon of the Day: US Growth Stinks

Cartoon of the Day: US Growth Stinks - growth  cartoon 04.05.2016

 

"Unlike many strategists (who missed calling the cycle top in US Consumption, Employment, and Profits last year), we have stayed with The Cycle call we’ve had all along here in Q2," Hedgeye CEO Keith McCullough wrote today.


Daily Trading Ranges

20 Proprietary Risk Ranges

Daily Trading Ranges is designed to help you understand where you’re buying and selling within the risk range and help you make better sales at the top end of the range and purchases at the low end.

Game Over. Central Bankers Can’t Do Anymore

In this brief exchange on The Macro Show, Hedgeye Demography Sector Head Neil Howe and CEO Keith McCullough discuss how global markets are closing in on a critical monetary policy exhaustion end point. “Why don’t people accept that?” Howe asks. “[Central bankers] can’t do anymore!”

 


President Paul Ryan? ... Plus, Donald Trump's Worst Week Ever

Below is a brief excerpt from our Potomac Research Group colleague and Chief Political Strategist JT Taylor's Morning Bullets sent to institutional clients each morning. For more information on how you can access our institutional research please email sales@hedgeye.com.

RYAN THE REDEEMER?

President Paul Ryan? ... Plus, Donald Trump's Worst Week Ever - paul ryan 2

 

Washington gossipmongers are out in full force - speculating on a calculated bid for the presidency by Speaker Paul Ryan. Ryan would certainly be a formidable opponent to the Democratic candidate in the fall, but jockeying for the top spot isn't high on his list.

 

It's not Ryan's style to upend a political process, and we believe that if this scenario were to come to fruition, it would be similar to the path he walked to the speakership. Currently, there aren't many qualified, well-vetted alternatives who could be a unifying force besides Ryan - leading us to believe that if an open convention occurs and multiple ballots ensue, he could be the chosen one.

TEFLON ... GONE?!

President Paul Ryan? ... Plus, Donald Trump's Worst Week Ever - trump 787

 

Many have labeled last week as Donald Trump's worst yet - and that charge may be validated if he loses today's primary in WI. The Badger state was Trump's to lose given the similar dynamics to other victories he's notched - one with many blue-collar Democrats and disaffected voters, that also allows independents to vote. Although Trump is trailing Ted Cruz by a small margin, it's becoming clear that his antics are not serving him well with WI Republicans - in particular Republican women.

 

The combination of his comments on abortion, shaming of Heidi Cruz on Twitter, foreign policy missteps, the Lewandowski incident - the list goes on - have led us to believe that he is no longer the "Teflon Donald." Trump is likely to snatch defeat from the jaws of victory tonight - exposing weaknesses in his campaign and a failure to make the pivot to acting more presidential. 

WE THE PEOPLE?

We believe that no matter the outcome, Trump and Sanders' impact on the presidential election process will be felt for years to come. Both candidates have exposed the grip the establishment has on our system. On the Democratic side we have the superdelegate system designed to prevent anti-establishment, iconoclastic candidates from winning the nomination.

 

On the Republican side, we are witnessing the very beginning of backroom deals for delegates - in a collaborative effort to block Trump from the nomination. The voters are becoming aware of this flawed system where the election may indeed slip away from the people, and transforming into one controlled by party leaders - we think calls for the eventual dissolution of the superdelegate system and restructuring of the delegate selection process are not far behind.


It's Happening: The Belief System Is Breaking Down

Takeaway: The only thing crashing more than markets in Japan and Europe is faith in central planners. Is the U.S. next?

It's Happening: The Belief System Is Breaking Down - central banker cartoon 02.02.2016

 

The #BeliefSystem that central-market-planners in Japan and Europe can levitate stock markets continues to crash…

 

According to Reuters, "Bank of Japan Governor Haruhiko Kuroda stressed on Tuesday his readiness to expand monetary policy still further, saying that market moves would be key factors the central bank would examine in deciding when and how it might next expand stimulus."

 

So... how about those "market moves?"

 

Some analysis via Hedgeye CEO Keith McCullough in a note sent to subscribers this morning:

 

"Japan big rip higher in the Yen to immediate-term overbought at 110 (vs USD) smoked Japanese stocks again, -2.4% Nikkei taking the crash from the July US Equity market high of 2015 to -24.6% - negative yields is not working in Japan or Europe (DAX down -2.4% and -22.6% since last year’s top)"

 

 

Take a look at the strength of the Yen versus the Dollar, a move in direct opposition to the BOJ's intent:

 

It's Happening: The Belief System Is Breaking Down - jpy strenght

 

 

Meanwhile, in Europe, Germany is crashing...

 

 

... Italian stocks? plummeting...

 

 

The latest "jig is up" moment for central planners came in India. The Reserve Bank of India cut interest rates to a five year low... and (surprise!) the Bombay Stock exchange fell.

 

 

The evidence is piling up. Global central bankers around the world can't fight economic gravity. But how about the U.S. and the Fed?

 

On that front, Hedgeye CEO Keith McCullough has been pretty candid about what he thinks. Watch the video below:

 


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