Baltic Dry Index 1271 Brent Crude 52.20
A very happy,
healthy, safe and prosperous New Year to all LIR readers. The next daily LIR
update will be on Wednesday January 2nd.
"I think it’s a tremendous
opportunity to buy. Really a great opportunity to buy."
President
Trump, Stock Bull. Christmas Day 2018.
This weekend, as we
approach year-end and the start of a very challenging 2019, we pose the great
burning conundrum of our age, is it more fun to bet on stocks in our great
casinos, once also known as stock exchanges, or to head over to real casinos
where the ply you with free drinks and food, while you bet on the uncertainties
of roulette?
Given this week’s
stock market action, I think I’d rather be in Monaco, Atlantic City, or Las
Vegas. At least the weather is better in two of the three and with roulette,
you know what the odds are before you bet.
Below, why the US
Tort Bar is salivating over 2019.
"To
the C students, I say you too can be president of the United States."
President
George W. Bush
UPDATE January 1,
2019
Hedge funds’ hopes for 2018 dashed amid closures
This year was supposed to be when
rising volatility and yields brought back the glory days. Instead, returns fell
and investors fled
December 24, 2018 Updated:
December 31, 2018 3:10 p.m. GMT
A year ago,
the hedge fund industry was full of optimism.
After years
of performance trailing the stock market, fund managers saw the end of central
banks’ quantitative easing — and, by extension, an end to what many perceived
as artificial asset valuations pumped up by government intervention — as the
chance to return to the glory days of colossal market-moving bets and
double-digit returns. With interest rates and volatility on the rise, it would
soon be time to crow about record-setting profits.
But one
record set in 2018 was a landmark few hedge fund luminaries cared to dwell on.
Last October, in what industry insiders believe to be a first, three US-based
hedge funds shut in the course of the same week. Tourbillon and Criterion were
among those to cease operations, following an inability to generate sufficient
money and capital.
Other hedge
funds to have bitten the dust in 2018 include Omega Capital, run by industry
veteran Leon Cooperman, and Cerrano Capital, whose backers included activist
investor Dan Loeb, but which failed to last a year in operation.
In the
run-up to Christmas the Decca fund, run out of London-based fund firm City
Financial, and New York-based hedge fund Latimer Light Capital also informed
investors they were closing.
There are
many theories but little consensus on why 2018 has been so miserable for many
hedge funds. The one thing nearly everyone agrees on is that it has become
harder to convince investors that the glory days are returning soon.
----Money
is flowing out of the hedge fund industry. EVestment, the data provider,
estimates there have been net outflows among European-domiciled hedge funds of
$12.8bn this year, compared with inflows of of $28.9bn in 2017.
More
Here’s just how crazy this week was for the stock market, in one big chart
This Christmas week really was one for the history books. Whiplash, anyone?On Monday, the Dow Jones Industrial DJIA, -0.33% , the S&P 500 SPX, -0.12% and the Nasdaq Composite COMP, +0.08% all booked their ugliest-ever plunges in the shortened Christmas Eve trading session. All three indexes rebounded Wednesday, only to sink early Thursday and then turn around in dramatic fashion to finish the session higher. The week finished Friday with an indecisive whimper, as stocks flipped back and forth between gains and losses all day long.
----The week’s sharp moves were attributed mostly to light holiday trading volume and computer-driven trading. But the ups and downs during a usually calm period are no doubt stoking investor anxiety about what’s to come.
As we gear up for one more day of 2018 trade and a (fresh?) start in the New Year, let’s revisit some of the most eye-popping stats and charts ...
Ugliest pre-Christmas trading day on record
• On Monday, the Dow finished down 653 points, or 2.9%, representing its worst decline during a session prior to Christmas in the 122-year-old blue-chip gauge’s history, according to Dow Jones Market Data.• The S&P 500 fell by 2.7%, marking the first session before Christmas that it booked a loss of 1% or greater — ever.
----By the time Monday’s shortened trading session was over:
• Every
S&P 500 sector was negative for the year.
• Utilities
became the only S&P sector not in a correction or bear market.
• Many
indexes hit bottoms, with the S&P Composite 1500 entering a bear market.
• The
S&P 500 was just 0.02% shy of officially entering a bear market (an amount
so negligible many simply called it for the bears — though lines do have to be
drawn somewhere).
----Then Wednesday it was as if Christmas Eve had never happened, with stocks more than offsetting their staggering losses from the previous session:
• The Dow logged its first-ever 1,000-point single-session gain.
• The Dow and S&P 500 rose 5%, and the Nasdaq 5.8% — for all three indexes, that was good enough for the largest one-day percentage gain since March 23, 2009.
• The FAANG stocks — Facebook FB, -0.98% , Apple AAPL, +0.05% , Amazon AMZN, +1.12% , Netflix NFLX, +0.20% and Google parent Alphabet GOOG, -0.65% GOOGL, -0.59% — posted the largest one-day market-cap gain on record, lifting their aggregate equity valuation by $163.7 billion.
• Retailers were big gainers, with Amazon soaring more than 9% after the company said it had registered another record holiday season.
Biggest one-day turnaround in years
• The Dow swung from a 2.67% decline at its Thursday session low to a positive finish, up 1.1% — its biggest such intraday swing since Oct. 4, 2011, when it recovered from a fall of 2.75% at its low.----For the week, the Dow rose 2.8%, while the S&P 500 climbed 2.9% and the Nasdaq registered a weekly gain of 4%.
• All three
indexes marked their first weekly gains after three straight weekly declines.
Take Five: The Year of the Bear! World markets themes for the week ahead
December 28, 2018 / 1:04 PM
LONDON
(Reuters) - Following are five big themes likely to dominate thinking of
investors and traders in the coming week and the Reuters stories related to
them.
1/BEAR HUGS
After
swallowing markets from Germany to China, the bears reached U.S. shores in
December.
Markets
there are fighting back but the outlook is not great. For one, growing numbers
of global indices have notched up the 20 percent peak-to-trough drop denoting a
bear market. U.S. stocks, which seemed invincible until mid-year, have posted
the worst December performance since the Great Depression. Second, the world
economic outlook is steadily darkening and upcoming PMI data should confirm
that.
----
In Europe, Germany’s DAX fell to the bears in early December and the euro zone
bank and auto sectors are down a whopping 40 percent and 36 percent
respectively from this year’s peaks. This week, the leading pan-European equity
index confirmed it too had entered bear territory, following Wall Street’s
Christmas Eve shakeout.
2/ PART OF THE JOB
U.S.
President Donald Trump had several things going in his favour as he headed into
2018, and the two he most frequently trumpeted were the roaring stock market
and booming jobs market. As we leave the year, the picture has changed
somewhat, with U.S. stocks enduring their worst month since the financial
crisis. But ... he still has that strong jobs market. December’s non-farm
payrolls data is due on Friday (it will be reported despite the government
shutdown) and the 178,000 new jobs estimated to have been created will push
total U.S. employment over the 150 million mark for the first time ever.
More
China’s stock drop this year reduces bubble worries, central bank official says
|
The local market is closed Monday, and the Shanghai composite ended the year Friday at 2,493.9, down nearly 25 percent for 2018 in its worst year since 2008. The index hit a high of 3,587 in January but tumbled as much as 31 percent from that level in October amid worries about an economic slowdown, a brewing trade war with the U.S. and corporate financing issues
“The extent of this drop is rather large,” said Zhou Xuedong, spokesman, director general of the general executive office, People’s Bank of China. “But the market hasn’t seen major panic, (stock) dumping, or a large number of listed companies going bankrupt. This is a natural process of the market adjustment. The market participants have become relatively more mature.”
“After the stock market decline from 3,500 to 2,500, (with) valuations this low we are actually very safe,” Zhou said in Mandarin, according to a CNBC translation of his remarks to reporters in Beijing on Friday evening. “The fewer bubbles there are, the safer we are. When stocks are safe, the overall banking industry is safer.”
Chinese authorities have made a flurry of announcements in the past several months in support of stocks and the economy. Mainland trading is dominated by sentiment-driven retail investors rather than institutions, making market performance less tied to economic growth than stock indexes might be in other countries. But as an indication of how much uncertainty hangs over China, the Shanghai composite has barely recovered from a near-four-year low hit in October and remains half the level it hit in 2015.
More
Finally, staying with
China, President Trump’s unexpected
U-turn on Iran oil export waivers is now getting scalps far from the US
fracking sector. China’s Unipec trading arm of giant Sinopec seems to have bet
wrong. The first of many yet to own up, I suspect. More will likely follow in
January. Who would be a trader or decision maker, in the unstable era of
President U-turn?
China’s Sinopec is said to suspend top officials at trading arm, shares sink
Chinese state oil major Sinopec has suspended the two top officials at its trading arm Unipec after the company suffered losses, sources with knowledge of the matter said on Thursday.
Unipec’s President Chen Bo, an industry veteran who helped the company become one of the world’s largest oil traders, has been suspended along with the senior Communist Party representative at the company, Zhan Qi, said five sources, who asked not to be identified due to the sensitivity of the issue.
“The government inspectors were looking into the company’s operations for the past few years ... one of the problems they found was the severe trading losses in the second half of this year because of wrong market judgement,” one of the sources said.
The sources
did not refer to any wrongdoing on the part of the two men.
Sinopec,
Asia’s largest refiner, has appointed two senior executives, Ling Yi Qun and
Chen Gang, to manage Unipec, the sources said.
A spokesman
for Sinopec had no immediate comment.
Oil prices
have fallen more than 30 percent since hitting their highest in four years in
October, hurt by oversupply concerns as major producers ramped up output while
the United States unexpectedly issued waivers that allowed countries to continue
importing Iranian oil.
More
"Harry Hinkle: Florida and Mustangs
and foxes, how are you gonna pay for all of this?
Whiplash Willie Gingrich: Our credit is good.
Harry Hinkle: Well don't you think we better wait 'til
we see some of that insurance money?
Whiplash Willie Gingrich: Wait? Who waits nowadays?
Take the government. When they shoot a billion dollars worth of hardware into
space, do you think they pay cash? It's all on the Diner's Club!"
The Fortune Cookie. 1966.
The monthly Coppock Indicators finished November.
DJIA: 25,538 +157 Down. NASDAQ:
7,331 +205 Down. SP500: 2,760 +129 Down.
The indicators
closed December.
DJIA: 23,327 +1135 Down. NASDAQ:
6,635 +152 Down. SP500: 2,5-7 +90 Down.
Normally this would suggest more
correction still to come, but with President Trump wanting to be judged by the
performance of the stock market and his Treasury Secretary activating the
Plunge Protection Team after the Christmas Eve Crash, will a politicised PPT
cover the President’s back? Probably the
safest action here is to be long fully paid up synthetic double options on most of the major indexes.
Have a great New Year Everyone.
"We
are ready for any unforeseen event that may or may not occur. "
President
George W. Bush
