Business

Three weeks ago, when looking at the incoming Q4 results, we were stunned by an unprecedented divergence: that of GAAP and non-GAAP earnings. We showed this difference as follows:

... and noted that while on a non-GAAP basis, the S&P's trailing P/E is a relatively rich 16.5x (over 17x as of today), it was the GAAP P/E that was troubling, because at just 91.5 in actual S&P EPS, this implies that the GAAP P/E of the overall market is now a near-record 22x.

We showed the delta between GAAP and non-GAAP as follows:

What could go wrong?

Today was all about the 200-day moving average for the S&P 500...2019.40 was all that mattered...

On Sunday, millions of Brazilians took to the streets to call for the ouster of President Dilma Rousseff, who is thought to have cooked the fiscal books in 2014.

She’s not yet implicated (directly anyway) in the long-running Carwash probe, but some think that may change soon as the investigation seems to get closer and closer to her officer with each passing week.

But it’s not just corruption that Brazilians are fed up with.

Crude oil prices "appear to have reached their peak for now," warns Saxo Group's Ole Hanson as he explains there are several reasons why.

Among the chief concerns putting a damper on Brent prices is an upcoming meeting between OPEC and non-OPEC producers to discuss a potential output freeze, he says. Iran is now saying it will not curb production before it has reached 4 million barrels a day.

 

With one central bank meeting down, but two to go, VIX and VSTOXX (Europe's VIX equivalent) have plunged to 2016 lows discounting any 'events' upsetting the complacency anytime soon. However, as Goldman's options strategists note, the medium-term skew (3M to 1Y) are at or near record highs as traders prepare for turbulence amid 'Brexit', US elections, and of course the inevitable 'Fold or No Fold' Fed decisions later in the year.