United States

Follow EM or not? That is the big question that BofAML asks as once again Emerging Market stocks are decoupling (lower) from an exuberant US equity market.

Submitted by David Stockman via Contra Corner blog,

The posse of fools in the Eccles Building is so petrified of a stock market hissy fit that it has more or less created a Wall Street doomsday machine.

After trolling on the zero bound for 89 straight months now, the FOMC falsely believes that it has levitated the U.S. economy to the cusp of full-employment via massive liquidity and wealth effects pumping.

• Oil nudges $50 a barrel as investors bet on shrinking overhang (Reuters)
• From hinterland to wonderland: China's 'teapot' refinery boomtowns (Reuters)
• Peter Thiel Has Been Secretly Funding Hulk Hogan's Lawsuits Against Gawker (Forbes)
• China Wants to Set Prices for the World's Commodities (BBG)
• Big Banks Ladle On the Risk (WSJ)
• China Said to Plan Asking U.S. on Timing of Fed Rate Hike (BBG)
• ECB credit buying to start small, betting on issue boom (Reuters)
• HP Enterprise to Spin Off, Merge Services Business (WSJ)

In his latest contrarian comments to Reuters, Jeff Gundlach focused on the recent flipflopping by the Fed and its various speakers who are now positioning the market for an imminent rate hike despite the US economy still treading water, and said that while many Fed officials are "dying to raise rates," but all that matters is Janet Yellen's opinion, a glimpse of which we will get as soon as this Friday when she speaks at Harvard. "All that matters is Yellen. She is still there." 

The single biggest event overnight was the PBOC's devaluation of the Yuan to the lowest since March 2011, setting the fixing at 6.5693, the highest in over 5 years and in direct response to a stronger dollar, which however if one looks at the DXY remains well below the recent highs in the 100 range, suggesting for China this is only just beginning.