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How That $1.4 Trillion In Repatriated Cash Might Result In U.S. Job Losses, Not Gains

Moody’s estimates that there is roughly $1.4 trillion dollars belonging to U.S. corporations that has been building up in foreign bank accounts for years now to avoid the 35% corporate tax that would be levied on them if they were brought back to the U.S.  Of course, getting that $1.4 trillion back to the U.S. […]

SocGen: “Every Bit Of Good News – Including Tax Reform – Is Now Priced In”

The global stock market is just a few days from entering the history books, largely thanks to the constantly priced in tax reform. As SocGen calculates, and barring any end of year sell-off, the MSCI World index is set to record it first ever year of posting a positive total return in every single month […]

Albert Edwards: “Clients No Longer Care About Overvaluation; They Are Concerned About Triggers And Timing”

“How do you know when an asset price rise has turned into a bubble?” That’s the rhetorical question Albert Edwards leads his today’s Global Strategy Weekly note, and responds that in the non- virtual world, valuation is often a good starting point. “A bubble can also be identified by the steepness and persistence of any […]

SocGen Thinks Emerging Markets Are Breaking Down: Here’s Why

With Goldman Sachs publishing at least one, and in most cases two or more weekly reports urging its clients to keep pouring capital into emerging market assets, whether equities, bonds or FX, it is no surprise that Emerging Markets remain the big winners in 2017, up 10% points more than developed this year. However, as […]

Watered Down And Delayed – European Bank Shares Love The Final Basel III Capital Rules

To the relief of the banks and investors, the Basel III rule book was “watered down” sufficiently that the announcement that the deadlock had been broken led to a spike in European bank stocks on Friday morning. The sticking point holding back the clarification of Basel III for nearly a year had been how to […]

JPMorgan’s Outlook For 2018: “Eat, Drink And Be Merry, For In 2019…”

While the prevailing outlook by the big banks for 2018 and onward has been predominantly optimsitic and in a few euphoric cases, “rationally exuberant“, with most banks forecasting year-end S&P price targets around 2800 or higher, and a P/E of roughly 20x as follows… Bank of Montreal, Brian Belski, 2,950, EPS $145.00, P/E 20.3x UBS, […]

Goldman: These Are The Three Biggest Risks Facing Stocks In 2018

When it comes to the most influential investment bank in the world, Goldman Sachs, its 2018 outlook is borderline euphoric despite the bank’s own explicit admission that valuations have never been higher. In a tortured, goalseeked analysis which we discussed last week, the bank’s chief equity strategist David Kostin said that he expects a year […]

Just 10 Companies Account For 33% Of All Market Gains Since Trump’s Election

Yesterday we laid out the reasons why French bank SocGen unveiled a surprisingly contrarian forecast, according to which the S&P would tumble from its current level over 2,600 to 2,000 in 2018, representing a more than 20% bear market drop… … the drop catalyzed by rising interest rates pressuring P/E multiples, a late cycle economy […]

Get Out Now: SocGen Predicts Market Crash, Bear Market For The S&P

While the charade of sellside analysts releasing optimistic, and in the case of Barclays and Goldman “rationally exuberant”previews of the year ahead… … is a familiar, long-running tradition on Wall Street, rarely has the intellectual dishonesty and cognitive dissonance been quite so glaring: take Goldman, which while admitting that valuations have never been higher, and […]

“Very Close To Irrational Exuberance”: Asian Equities Break Above All-Time High As Hang Seng Clears 30,000

Following the new all-time high in US equities, the MSCI Asia Pacific Index broke through its November 2007 peak to make an all-time high in Wednesday’s trading session. This was something we noted could happen yesterday in “SocGen: Asian Equities Are So Awesome, A China Minsky Moment Is ‘Manageable”. The dollar weakened slightly after outgoing […]

Novogratz Slams Dimon: Buy Bitcoin Because “We No Longer Trust Financial Institutions”

It must be a sign that cryptocurrencies are becoming mainstream when Bloomberg TV launches the first of a six-part series on this comparatively recent innovation. Setting the scene, Bloomberg replayed comments made in interviews from what it described as “Wall Street sceptics”, including (not surprisingly) JPMorgan Chase’s Jamie Dimon, Neil Dwane of Allianz Global Investors […]

SocGen: Asian Equities Are So Awesome, A China Minsky Moment Is “Manageable”

If we’re going to discuss Asian equities in the context of “awesome”, we should begin with Tencent. Tencent, which has more than doubled this year, drove Asian stocks higher during Tuesday’s trading session. Trading on the main board of the Hong Kong Stock Exchange hit a 28-month high of HK$157 billion with one fifth of […]

What Happened To Cash Flow Growth: The Red Flag In Q3 Earnings

Listening to Wall Street analysts, or their financial press cheerleaders, one would be left with the impression that earnings season has been gangbusters, and the recent 2-3 quarters of growth are sure to lay the basis for a new golden age in which EPS rises at double-digit rates for years to come. There are just […]

In Dramatic Rebound, Euro, DAX Recover All Losses; “Is Strong Government Overrated?” SocGen Asks

Having tumbled 80 pips to a one week low in kneejerk response to the late Sunday news that Angela Merkel had failed to form a government following the collapse of the “Jamaica Coalition” talks – when the Free Democratic Party walked out, saying the differences with the Green party were too great to bridge – […]

Albert Edwards On The Selloff: “Comparisons With October 1987 Are Entirely Justified”

Last week, when equities were still blissfully hitting daily record highs, we showed the one “chart that everyone is talking about“, or if they weren’t they soon would be: the sharp, sudden disconnect between the junk bond and stock market … … a disconnect which – as we showed at the time – was last […]