We've frequently warned about the myriad of potential risks arising from the massive capital flows from active to passively managed accounts which will eventually, and inevitably, wreak havoc upon the markets. It is, in fact, this transition which is inextricably linked to the market's apparent disregard for traditional valuation metrics as it surges to all new highs with each passing day.
Authored by James Howard Kunstler via Kunstler.com,
The European Commission has decided to broaden sanctions against Moscow on Friday. As RT notes, more Russian individuals and firms accused of delivering Siemens gas turbines to the Crimea have been blacklisted.
The updated blacklist includes Russian Deputy Energy Minister Andrey Cherezov, the head of the department of operational control and management in Russia's electric power industry Evgeniy Grabchak and state firm Technopromexport CEO Sergey Topor-Gilka.
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With global stock indices - and the S&P - both just shy of all time highs, even as bond yields stubbornly refuse to validate the "equity upside" story, Bloomberg's macro commentator Richard Breslow, looking at recent yields and spreads writes that "in reality, these spreads just can’t be doing what they’re doing if the tapering and rate-hike stories were truly being given credibility" and has a troubling thought: "what is bond yields have been right all along"?
It took stocks only a few minute to "price in" the latest political shock out of Washington, and as of this morning Emini futures no longer care that Mueller has a grand jury, trading 0.08% in the green with European stocks and Asian shares all little changed as investors await the looming July jobs report, which is expected to show a slowdown in hiring from 222K to 180K but will have little impact on either the Fed's thinking or the market.