In a quiet overnight session, S&P 500 futures are fractionally in the green (2,426, +0.2%) with European and Asian stocks as oil drops second day after an initial ramp higher amid speculation that LIbya and Nigeria may be asked to cap their production. Nasdaq 100 Index are again higher, following the biggest daily advance in more than a week, up 0.4% as of 6:20 a.m. in New York.
Despite a hiccup in the last week or so, global stocks survived as the best-performing asset class of the year (with the MSCI All-Country World Index wrapping up its best first half in 19 years)...
But, as Bloomberg reports, Wall Street strategists are fighting historic odds when urging investors not to chase the rally in the U.S. stock market.
They’re predicting the S&P 500 Index will see momentum fade in the second half after shares climbed 8.2 percent for the best first-half performance since 2013.
The euro soared to the highest level in over a year while bond yields and global shares also climbed, as an ongoing barrage of coordinated hawkish comments from central banks signaled the era of easy money might be coming to an end for more than just the United States. S&P futures were fractionally in the green following the best day for US equities in two months, as banks climbed after passing the Fed's stress tests and announcing bigger than expected shareholder payouts.
As we have pointed out numerous times, Goldman notes that elevated US policy uncertainty and geopolitical risk indicate heightened risk of more frequent political and geopolitical tail events, in the form of both ‘known unknowns’ or ‘unknown unknowns’...
And given the extreme complacency in markets, Goldman suggests the following trade as a clean way to play that concept of reality emerging into market pricing once again...
Which equity option strategies work in low volatility markets?
We used to think of forward guidance as an important, long-term, device in the central bank tool box. As Bloomberg's Richard Breslow explains It was meant to direct investor, business and consumer behavior through the vicissitudes and noise created by what seem seminal but are often random events. It was what convinced investors that buy and hold, augmented by gobbling up every dip, was a winning, and protected strategy. A way of saying, you can listen to every speech on the schedule but this is what the people that matter are telling you.