Business

Today marked the 13th consecutive day of positive HY fund flows (bringing total to $8.6bn)...

But as Credit Suisse explains, the nature of this demand is 'different'...

Investors likely using the ETFs as a placeholder for cash in the absence of new supply, with HY issuance down ~74% year on year.

 

With ballooning ETF inflows the past few weeks, the liquid sector has become increasingly vulnerable to ETF cash rotating out upon the availability of new supply.

 

The last 3 weeks have been a near unprecedented rip higher in stocks... as markets anticipated G-20 cooperative actions (and then BoJ and ECB follow-through) creating a vicious short-squeeze bounce..

This has sent The McClellan Oscillator to its most overbought since January 2009...

What happened then?

US financials are tumbling after The Fed proposed a rule that would limit banks with $500 bln or more of assets from having net credit exposure to a “major counterparty” in excess of 15% of the lender’s tier 1 capital. Bloomberg reports that The Fed's governors plan to vote today on the proposal. The implications of this are significant in that it will force some banks to unwind exposures and delever against one another (most notably with potential affect the repo market which governs much of the liquidity transmission mechanisms).

"Uncertainty" exploded in January for The Fed, and after today's "great" (surging job gains) and "terrible" (plunging wages) jobs data (as well as surging current inflation and plunging inflation expectations), we can only imagine Yellen will be even more confused at March's meeting.

Source: @Not_Jim_Cramer

Time for a stock market selloff to force The Fed to back off its tightening bias once again...

With Dec rate hike odds now above 70%...

Legendary billionaire investor Jim Rogers is certain that the U.S. economy will be in recession in the next 12 months. During an interview on BloombergTV, he explained why he had covered his position in the Japanese yen, saying that the nation is "printing a lot" of the currency. Rogers also warned that there is a "100 percent" probability of a recession in the U.S. within a year, and with debt levels very high across the nation, this is a grave concern.

Jim Rogers sums up the carnage that is coming...