Thursday, January 14, 2016

Stocks Got Crushed On Wednesday........

Stocks Got Crushed On Wednesday!

Markets In Freefall: Stocks Extend Worst Ever Start To Year!

The Dow fell 365 points on Wednesday as each of the major averages were off over 2%.

Brent crude oil — the international benchmark — cracked $30 a barrel at one point, its lowest level since 2004.

Albert Edwards, an analyst with Societe Generale, said the S&P 500 could  fall below the 666 level it bottomed at in March 2009.

Edwards sees a recession led by the manufacturing sector — which is already in recession — and thinks a 75% sell-off in stocks could follow. At the bottom, Edwards thinks the S&P 500's price-to-earnings ratio would fall to about 7.

Jeff Gundlach the bond king, thinks oil is a disaster, rates could head higher, and gold could hit $1,400.

Chinese stocks are down over 20% from Dec highs at 2-year lows

On the current trajectory,  the market can not stay stable beyond a few quarters.

We are down to the last bubble standing, all the rest....EM debt bubble... emaciated, FX Carry... crucified, Crude...crushed,  High yield bonds... burst, Chinese equities... blown, Trannies... trounced, Small Caps... slammed, Biotechs... busted, and FANGs finally FUBAR! But there is one big (very big) bubble left in the world that no one is talking about, and a rather large liquidity-busting pin beckons... for bonds, equities and China.

AS YOU CAN SEE FROM THE DATA BELOW,DESPITE OFFICIAL LIES,THINGS HAVE BEEN DETERIORATING FOR QUITE SOMETIME:

1 DAY RETURNS

Dow 16,151  -365   2.21%
  
Nasdaq  4,526   -160    3.41%

S&P 500  1,890    -49   2.51%


5 DAY RETURNS

Dow 16,151    -756     4.47%

Nasdaq 4,526   -310   6.41%

S&P 500 1,890   -100  5.04%


1 MONTH RETURNS

Dow  16,151  -1598     9.00%

Nasdaq 4,526    -545   10.75%

S&P 500 1,890   -183    8.83%


3 MONTH RETURNS

Dow  16,151   -774   4.57%

Nasdaq  4,526  -257  5.37%

S&P 500 1,890  -104  5.23%


6 MONTH RETURNS

Dow  16,151  -1899   10.52%

Nasdaq  4,526  -573  11.24%

S&P 500 1,890  -217  10.32%


1 YEAR RETURNS

Dow 16,151  -1276  7.32%

Nasdaq 4,526  -113  2.44%

S&P 500  1,890  -121  6.03%

Easy money from the Fed helped send speculative dollars into oil and gas in a big way over the last several years. This dynamic, then, led to the chart below. 

A lot of money, poorly invested money has to come out of the energy space before anything changes. Lots of pain lies ahead.




It has been another choppy, illiquid, volatile overnight session, which started with weakness out of China, whose Shanghai Composite dropped 20% into another bear market in early trading, then further slammed by news of a terrorist attack in Jakarta.

Then after China faded from center stage, the big mover, both in FX and cross-assets, was the EUR, which soared nearly 100 pips just after the European open on reports the ECB is content for current policy measures to filter through. This in turn slammed the carry trade of choice, the USDJPY, and ultimately trickled down to US equity futures which after hitting overnight highs just shy of 1,900 have since tumbled 22 points to session lows, at 1,879, down 0.2% on the session.

Finally, Europe was hit by a double whammy when Renault shares plunged 20%, most since August, after Agence France-Presse reported that French fraud investigators seized computers from the automaker as part of an apparent probe into emissions testing. Other carmakers across Europe were likewise slammed. ... and since there has been no official statement from the company, nobody knows what is really going on and the selling has persisted.

Everything boils down to concerns about global growth," said Ralf Zimmermann, a strategist at Bankhaus Lampe in Dusseldorf. "There are few people out there willing to buy the dips because everyone is scared that the selloff will be deeper the next day. And that has been the case. I would sell any highs -- there is definitely potential for bigger losses in the short term.

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