S&P

Macquarie's equity research team has just offered up a valuable economics lesson which seems to perfectly, if inconveniently, explain why their business model is doomed by the upcoming implementation of MiFID II. 

So what happens when you compete in a 'slightly' fragmented market (see below) to sell a highly commoditized product to a customer that places so little value on the product that it has historically only existed courtesy of subsidies from trading revenues...then a regulatory body suddenly comes along and says you have survive as an independent operation?

"I want it all... and I want it now...!!!"

While U.S. equity futures were little changed in a rerun of every other morning this month ahead of a diagonal ramp that closes the S&P at daily all time highs, things were more volatile elsewhere with the dollar sliding as investors weighed the possibility that current Fed Governor Jerome Powell, seen widely as far more dovish than Kevin Warsh, might take the reins from Janet Yellen, who Bloomberg reported was said to be getting the cold shoulder.

It's deja vu all over again.

In a repeat of yesterday's session, where US equities and the dollar levitated in a one-way trade, Tuesday's muted session - where in addition to closed China and South Korean markets, Germany's Dax is also shut for holiday - has seen early dollar and European equity strength, while the S&P is set for new record highs amid higher E-minis and a VIX that is again lower after 5 consecutive days of declines.

Is it QE or is it earnings?