There is no doubt that the equity bull trend experienced technical damage and a period of volatility and weakness is likely to follow. Let’s survey the technical damage that was done on Thursday and carried through to Friday. Watch these lines in the sand, all four of my tripwires were triggered on Thursday. The line in the sand for the 10-year Treasury yield was 2.4%, which was breached Thursday and decisively on Friday. Never mind the spread between EM bonds and Treasuries, look at the relative performance of EM bonds against US high yield, which broke an important relative support line. If market believes that contagion risk is rising, it should show up in the relative performance of financials. For instance, I was concerned about the contagion risk posed by the EM sell-off. I was highly concerned about tail risk because of the tight liquidity conditions in China, as it had the makings of a credit crunch. The act of liquidity injection alleviated many of those concerns. Though that is lower than the the boutique market’s historical average return of around 10%, it would be a far better outcome than the decline that many on Wall Street worry will be the result of the Fed dialing back its stimulus program.
The deal is the third that Hipgnosis, listed on the stock market in 2018, has struck this week after agreements with Fleetwood Mac guitarist Lindsey Buckingham on Tuesday and record producer Jimmy Iovine on Monday. Senate Republicans who might otherwise broker a deal face primary challenges that make compromise potentially deadly. Other Senate Republicans are jockeying for 2016. And congressional Democrats have no appetite for any bargain – grand or otherwise – that cuts entitlement spending. Nothing in this blog constitutes investment advice and any recommendations that may be contained herein have not been based upon a consideration of the investment objectives, financial situation or particular needs of any specific recipient. Either Qwest or I may hold or control long or short positions in the securities or instruments mentioned. Insiders may sell for all kinds of reasons. When private companies decide to sell shares of stock to the general public, they conduct an initial public offering or IPO.