Cashin: Markets Are Scared of BREXIT and German Bond Yields

Art Cashin sums up today’s narrative.

There are many stocks that will go higher as a result of a construction guy getting into the White House. However, if there’s one singular focus for The Donald, it would have to be to preside over the complete destruction of the wayward Mexico peso. It’s a very stupid currency anyway. We’re gonna make many billions shorting it.

Even if Trump were to ultimately opt against pursuing these policy ideas once elected, the peso would still be vulnerable until he made his intentions clear. “Listening to his rhetoric, you can tell the first country that would probably be affected would be Mexico,” said Andres Jaime, a foreign-exchange strategist at Barclays in New York. The peso would be “a good hedge,” he said.

The peso is down by 23% over the past year v the dollar.

All recent polls suggest the insolent freedom loving knaves from the UK will opt to leave the suicidal catamites in the EU. As such, the ECB and the BOE are concocting schemes to deal with any market dislocations, should the 6/23 referendum fail to go their way.

The European Central Bank would publicly pledge to backstop financial markets in tandem with the Bank of England should Britain vote to leave the European Union, officials with knowledge of the matter told Reuters.
The preparations illustrate the heightened state of alert ahead of the June 23 referendum, which will help determine Britain’s future in trade and world affairs and also shape the EU. The pound and euro have lost value on fears a Brexit could tip the 28-member bloc into recession.
Such an announcement from the ECB would come on June 24 if an early-morning result showed that British voters had chosen to leave the EU, according to the sources. The aim is to underpin investor confidence across Europe and contain further market jitters.
“There will be a statement to do whatever it takes to maintain adequate market liquidity,” said one senior central bank official, who spoke on condition of anonymity.

This is all looking fairly grim right now, as are all market squalls. However, if recent history is of any use to us, this fear will dissipate and lead to yet another central bank sponsored rally. Because death and the demise of markets seems like all but a foregone conclusion, I am increasingly skeptical that it can happen in such an insidiously pre-medicated fashion.

Nevertheless, I remain steadfast in my belief that our yield curve will invert, forcing me to remain long TLT until this is realized.

The poles aren’t like the rest of Europeans. They’re more old school, a hard people who find difficulties in changing light bulbs with less than 10 people. Their central bank chief, Jerzy Kropiwnicki just gave short sellers open season on the Polish currency, which has a long rich history of fuckery.

The currency slid 0.4 percent to a three-week low of 4.4295 per euro, adding to a 0.8 percent slump yesterday after Polish central banker Jerzy Kropiwnicki suggested that after a vote for Brexit, he would tolerate a slump to a record 5 per euro before intervening. The yield premium on the nation’s 10-year domestic bonds over Germany jumped to 326 basis points, the most since 2012.

“We identify the zloty as one of the most vulnerable currencies to Brexit risks,” ING Groep NV strategists Chris Turner and Petr Krpata wrote in a report to clients. “In such an environment, yesterday’s comments from the MPC board member Kropiwnicki are not helpful.”

Brexit concerns are hurting the zloty, which plummeted to a record intraday low of 4.93 per euro during the global financial crisis in 2009, because the Polish economy is the largest recipient of EU subsidies which could partly be at risk if the U.K. exited. The pound and European stocks extended losses on Tuesday after a series of new opinion polls showed Brits may vote to leave.

Since the euro is in the deflationary vortex, by extension, Poland is not. Hence, her currency waivers, as the Germans dig themselves a deeper trench.

But retail sales beat an already depressed guidance number, so everything is okay, right?

Germant bunds are now negative yielding instruments of arch deflation.

The CAC is getting smoked in France.

Gold is firming.

US treasuries are rising again. The ark is strong and able to withstand the storm.

Markets are poised for their 4th consecutive down day. Good morning.

Since 2008, the laxness at the FDA has helped investment bankers bring public piece of shit, early stage, biotech scandals. The vast majority of these stocks will go bankrupt, leaving investors in shambles.

Here are today’s biotech terrorist attacks on US investors.

INFI -64.9%, MESO -36.4%, KMPH -30%, RVNC -23.7%, IMGN -11.1%

The deflationary vortex is real. Japanese sovereigns, up to 15 yr durations, are negative–providing an anchor for rates worldwide. As long as Japanese rates continue to dive deeper into the crevasse of negative rates, the more support there will be for treasuries and ETFs like TLT.

The yen is climbing again. Each uptick in the yen is like a karate chop to the head for Japanese exporters.

The NIKKEI is down 1.25%

I got absolutely nothing from this segment. I tried to parse out some bullish data points and then some bearish ones, but came up with absolutely nothing. This was a masterful performance of complete gibberish.

This is a horrific earnings shortfall, especially for a company who’ve been granted supreme control over the Chinese internets. Revenue guidance is coming down in the magnitude of 10% and so are the shares in after-hours trading.

The stock is off $13 to the $150 area.

Co lowers its Q2 revs guidance to $2.807-2.823 bln, from $3.119-3.192 bln ($3.072 bln Capital IQ Consensus)

The revenue guidance revision was mainly attributable to the following factors:

First, regulatory authorities continue to review the online marketing practices of medical, pharmaceutical, healthcare and other similar businesses, and have also implemented stricter advertising regulations for medical organizations. The review is being rolled out with varied timing with different levels of implementation and interpretation across geographies. While the review is underway, the Company has observed a reduction or delay in spend from a significant portion of medical customers. These customers may be in the process of receiving instruction from regulatory authorities, gathering and submitting required documentation and adjusting their practices to comply with new regulations.

Second, the Company has reduced the number of sponsored links across the platform. This measure impacts revenue over the short term but enhances user experience and will drive benefit to Baidu over the long term.

The company will host a conference call tonight at 7:30pm.

Essentially, we have an Islamic extremism problem, not a good problem. This is a powerful speech, which will be reviled by many who walk around with acute mental ailments.