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JPMorgan Warns S&P Faces Large "Negative Gamma", Could Exaggerate Any Drop Next Week

JPMorgan Warns S&P Faces Large "Negative Gamma", Could Exaggerate Any Drop Next Week

Earlier in the week we noted the 'odd' surge in downside protection demand even as tech stocks were soaring, and now JPMorgan is noting the S&P has shifted to a large 'negative gamma' underhang which "could boost volatility if we were to sell off."

As Bloomberg notes, options markets suggest a lack of confidence in the rally. Traders are piling into downside hedges on every uptick in prices...

And JPMorgan derivatives desk writes:

The "Missing Slide": JPM Credit Card Charge-Offs Jump To Four Year High

The "Missing Slide": JPM Credit Card Charge-Offs Jump To Four Year High

While JPM was quick to provide all the favorable data in its earnings presentation (and not so favorable when it comes to the sharp drop in its markets sales and trading division) one thing was conspicuously missing: the slide on "Mortgage Banking And Card Services" which has traditionally been part of the bank's earnings presentation and was certainly featured prominently last quarter.

KKR Predicts U.S. Recession By 2019 And An Inevitable Cycle Of Millennial Deleveraging

KKR Predicts U.S. Recession By 2019 And An Inevitable Cycle Of Millennial Deleveraging

KKR has just published their 2017 mid-year economic outlook and it includes some rather dire predictions for the U.S. economy.  Among other things, KKR predicts a U.S. recession by 2019 and a massive cycle of millennial deleveraging after a huge expansion of consumer credit in the form of student and auto loans.

Before getting into the details, here's a chart depicting how KKR sums up the macro picture.  In short, pretty much every major economic growth and asset valuation metric in the U.S. is flashing red warning signs relative to historical norms.

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