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, only to rebound back over 3000 as the Chinese National Team decided to intrevene again, this time in the ChiNext small cap index, pushing it higher by 5.6%.
Don’t look now, but Renault may be pulling a Volkswagen.
The French company’s shares fell by as much as 23% on Thursday after an apparent raid on what a union official described as “sites that have to do with standards testing and engine certification.”
Earlier, AFP reported that the agents from the fraud office of France’s Economy Ministry visited the sites last week seizing computers as part of an apparent probe into emissions testing.
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...
Couple of things: first of all, any discussion whether the US market is in a profit (or revenue) recession must stop: the US entered a profit recession in Q3 when it posted two consecutive quarters of earnings declines. This was one quarter after the top-line of the S&P dropped for two consecutive quarters, and as of this moment the US is poised to have 4 consecutive quarters with declining revenues as of the end of 2015.
Correlation or Causation?
h/t DoubleLine
Easy money by The Fed expanding their balance sheet ENABLED tight oil to be produced 'economically'...
But the signals this sent to the market became self-fulfilling (thanks to an endless Fed put) further creating record US crude production (as the oil 'gold rush' ensued), forcing a real 'deflating' world to be 'glutted' with ever-increasing output of mal-investment-driven 'expensive' oil...