Submitted by David Stockman via Contra Corner blog,
The fast money and robo-machines keep trying to ignite stock rallies, but they all fizzle because bad karma is beginning to infect the casino. That is, apprehension is growing among whatever adults are left on Wall Street that 84 months of ZIRP and $3.5 trillion of Fed balance sheet expansion, aka money printing, didn’t do the trick.
And so the final quarter of 2015 is in the history books and we can officially accuse the US Bureau of Economic Analysis of "peddling fiction" about the US recovery, because at a growth rate of 0.69%, the annualized rate of economic growth was the lowest since the first quarter of 2015 when it grew an almost identical 0.64% which was blamed on the harsh weather. This time however, there is no easy scapegoat.
The breakdown was as follows:
The quest to find a vaccine for the Zika virus is on as the World Health Organization announce the virus is spreading “explosively” and the National Institute for Health officially declare the outbreak to be pandemic. The vaccine funding is already in place…and so is worldwide fear. At least three pharmaceutical companies are either considering or actively pursing programs, including giants GlaxoSmithKline GSK , and Sanofi SNY. But the company that appears to be the farthest along is a relatively small $500 million market cap biotech named Inovio Pharmacuetucals.
Less than 4 weeks ago, on January 6, we reported of the "Macy's Massacre: Thousands Fired; Guidance Slashed (Again); Weather Blamed", where in addition to the massive layoffs announced by the iconic retailer, we learned that as a result of the "historically warmer weather", the company's prior guidance was no longer valid. Here is what it said in early January:
Kuroda's decision to go full NIRP-tard is benefitting investors worldwide... in bonds. JGB yields hit record lows, 5Y Bunds are trading below the -30bps ECB deposit rate, and US Treasury yields are collapsing across the curve with 10Y below August's Black Monday lows back to 9 months lows...
US Treasury yields are plunging... 10Y broke below Black Monday lows...
And 5Y rejected the top end of its range once again...
JGB yields hit record lows...
With German and Japanese bond yields negative to 8Y and 9Y respectively...