Via Scotiabank's Guy Haselmann,
Market psychology established in recent years is reversing. Investing has taken on profound psychological aspects during the past few years. Investors have had strong incentives to stay in front of the aggressive actions by global central banks to take advantage of their implicit and explicit desire to ‘do whatever it takes’.
It was less than two months ago when we brought to you the "Macy's Massacre": on November 11, the stock of the iconic retailer crashed 13% and its CDS soared after Macy's announced a trifecta of weak data, reporting a miss on Q3 sales which came at $5.87 billion below the $6.1 billion expected, down from the $6.2 billion, as well as a plunge in comparable store sales which tumbled by 3.9%, far worse than the expected drop of -0.4%, and nearly three times as bad as the 1.4% drop a year ago.
Ok to summarize - China has lost control of its currency (whether intentionally or not) and that is forcing carry unwinds en masse; North Korea tests a nuke; European inflation disappoints; US services economy collapses (follows manufacturing's lead and another pillar of hope is destroyed); Crude crashes to fresh decade plus lows; The Fed offers nothing in the way of hope for growth (or puts); Bernanke says not to expect Fed to save stocks; World Bank cuts global growth outlook... But apart from that, everything is awesome!!!
Submitted by Jennfer Thomson via Gavekal Capital blog,
One of these bubbles is not like the others, one of these bubbles just doesn't belong... and yet still "officials" and talking-heads proclaim it cheap...
Still think that China's stock market is "stable" at these levels?
Source: Bloomberg