HSBC on Prospective Rate Hikes: ‘Never Forever’

Head of Global EM rates at HSBC, Andrew De Silva, sees opportunity in non-negative sovereign bonds, such as Australia, and believes rates might never go up.

‘Central banks don’t have a choice.’

French yogurt maker, Danone, is in talks to acquire the makers of disgusting soy milk, amongst others things, for as much as $10 billion–about a 15% jump from today’s closing price.

I recall the French government rebuffing others from acquiring Danone, due to protectionism. But now the French yogurt giant gets to own our awesome and amazing dairy and food snack maker for a song. Aside from Silk milk, they own Wallaby yogurt, Horizon milk and Earthbound Farm packaged salads.

This would make the second proposed deal over the past week, after the MDLZ for HSY bid. Other food companies that might catch some love include THS, SJM, POST and HAIN.

Humans are fat fucks, generally speaking. They like to eat food and will go through great lengths to control its supply.

The market seemed to digest the BREXIT fairly well. Markets are unchanged and the Germans are cooler than ever. All of the other EU countries have more swagger than before and the men from Brussels are eating ‘hella noms.’

So I ask you this question, young men about the interwebs, how will the EU enjoy a potential Italian exit from the EU? After all, being a tourist nation and exporter of wine and textiles, wouldn’t the Italians prefer to have their fucked up Lira back?

The rise of Italy’s ‘five star movement’, which was started by an Italian comedian blogger named Beppe Grillo (you can’t make this up), might equate to a comic tragedy for the CATAMITES domiciled in Brussels.

This is just like something Gavin Belson from Hooli would do. Following an unbelievably nazi loving AI twitbot experiment gone wrong, the sages at Microsoft have gone ‘full retard’ with their recruitment efforts, trying desperately and pathetically to relate to the idiot millennial generation.

This is unbelievable to me. Did a real person write this, or was is just an algorithm that one of the introverted nerds at softy cooked up?

B. Gross gives an overall assessment into the debaucherous world of fixed income, repudiating the Fed’s focus on employment data, warning regulators to keep a close eye on UK property fund post BREXIT.

Pay attention.

As crude goes, so does the market. Crude bounces off the morning lows and never looked back, closing higher by 1.7%. The market, the slave it is to crude, followed suit and crushed the helmets of those leaning short.

It was a splendid run, with the Dow closing higher by more than 70. Also, and additionally, bond yields reversed and started to spike a little. All of these factors contributed to the U.S. markets strength.

As for me, I sold out of my EDZ position, earlier in the morning–luckily near the session highs.

My positions in AU, NEM, AUY, GLD and TLT all pressed their rights higher. Whether gold and bonds are overbought is immaterial to me. These are long term thesis trades, based upon the laws of the physical universe. Your time frames do not apply in the multiverse from which I have carved out my plans.

All in all, it was a respite, more of the same, melt up into what could only be described as ‘the very worst news flow’ possible. Walls of worry are very fun to climb, until giant blades cut you in half.

I closed out the session an arch winner, 50% cash.

The weather Gods have been too gracious with the climes. As such, yields are set to produce a great bounty this summer. This is having a most arduous effect upon the prices of both wheat and corn, which are down upwards of 15% this past month.

Bucket shoppe analyst from Rodman and Renshaw believes the shares are worth $90.

Multiple regulatory decisions slated for this month. In our view, July is shaping up to be a busy month for Valeant, given the potential for three regulatory decisions in the coming weeks. On July 19, 2016, Valeant is slated to have its Biologics License Application (BLA) for brodalumab, an investigational anti-interleukin-17 (antiIL-17) monoclonal antibody for the treatment of moderate-to-severe plaque psoriasis, reviewed by an FDA advisory committee. We note that the brodalumab BLA currently carries a PDUFA approval decision date of November 16, 2016. If the panel discussion is favorable, we believe brodalumab could be approved in the U.S. by the PDUFA date. However, at this juncture we do not include any contribution from U.S. sales of brodalumab in our revenue model. Also on July 19, Valeant is slated to receive an approval decision from the FDA on oral Relistor® (methylnaltrexone) for opioid-induced constipation (OIC). In our view, a positive decision could significantly expand the target market for Relistor and may enable it to become a blockbuster with over $1B in annual sales. Finally, we note that on July 21, 2016, Valeant and its partner NicOx S.A. (COX.PA, not rated) are slated to receive an approval decision on Vesneo® (latanoprostene bunod) for the treatment of glaucoma. In our view, this is the highest likelihood approval event for Valeant, and we consider Vesneo to have >$500M peak sales potential in the U.S. alone. Since Valeant’s Bausch + Lomb (B+L) division is currently in labeling discussions with the FDA, we believe that timely approval of Vesneo® appears likely. Given these near-term catalysts, we reiterate our Buy rating and $90 price target on Valeant shares.

The WSJ Heard on the Street have a boolish article this afternoon.

Lastly, more than 12% of the shares are short. Couple this with the fact that the stock is off by 90% over the past year, and you have yourself a face ripping rally for the ages.

Mr. Ackman is pleased.

House Dupont might need to levy another tax against the good people of Delaware to pay for all of the mounting lawsuits against them and their little spinoff. Apparently, a jury awarded David Freeman $5.1 million plus punitive damages for giving the man cancer, by egregiously dumping green fucking slime into the water.

Back in October a woman won a case against them for causing kidney cancer, without being awarded punitive damages.

What did House DuPont do, allegedly?

THEY FUCKING DUMPED 55,000 pounds of toxic chemicals into the Ohio River, which then made its way down into the wells of the local water companies.

There are 3,500 other cases of this magnitude behind Mr. Freeman’s, readying to come forward.

The chemicals wantonly dumped into the Ohio River cause kidney and fucking testicular cancer. It’s like a sick House Dupont joke.

“Yes, John, let’s give all of the little people testicular cancer and make them cut their balls off.”

“Wise idea Henry. Let’s do it, indeed.”

Shares of CC are off by 19%, as they will pay most of the unfavorable ruling. By the way, Chemours is a recent target of Citron research.

Shares of DD are down 2%. It was very wise of them to spin CC off, no?

I hope they all rot in hell. But they’d like that, wouldn’t they?

After falling to a 31-year low Wednesday, sterling may sink another 7 percent to 11 percent this year in the aftermath of the U.K.’s Brexit vote, according to Goldman Sachs Group Inc., Deutsche Bank AG and Citigroup Inc. The currency will weaken to $1.20 on expectations the Bank of England will cut interest rates to contain the economic fallout from the referendum, according to Goldman Sachs and Citigroup. Deutsche Bank has an even more bearish forecast, seeing $1.15 by the end of 2016.
“The question is: how quick do we get there?” Richard Cochinos, London-based head of Europe Group-of-10 currency strategy at Citigroup Inc., the world’s biggest foreign-exchange trader according to Euromoney magazine, said in an interview with Bloomberg Television. “You’re going to need much greater inflows from investors long term and short term before the currency stops weakening.”

The pound has tumbled to a three-decade low during the past two days amid mounting evidence the Brexit vote is hurting confidence in Britain’s economy. With real-estate tremors and fund suspensions, concern is building that a failure to control the aftershocks of the referendum will propel the nation into a recession.

For more on the pound’s 100 years of debasement, click here

“We are switching to forecast a second leg of weakness for the pound, as the Bank of England’s policy response drives the currency weaker,” wrote analysts including Robin Brooks, chief currency strategist at Goldman Sachs, the world’s seventh largest currency trader. The bank forecast the exchange rate will reach $1.20, $1.21 and $1.25, respectively, in the next three, six and 12 months.

Goldman Sachs, Deutsche Bank and Citigroup are among the most bearish sterling forecasters, with only 11 of 62 analysts surveyed by Bloomberg seeing the exchange rate dropping to $1.20 or lower by the end of the year. In December, Deutsche Bank called for a 15 percent drop in the currency.

The pound fell as much as 1.7 percent Wednesday to $1.2798, the lowest since 1985. The Bloomberg British Pound Index, which measures the U.K. currency against major peers, has tumbled 13 percent since the referendum, and dropped to the lowest in data compiled by Bloomberg since 2004.

The pound “has much more to go,” wrote George Saravelos, co-head of global foreign-exchange research at Deutsche Bank in London, the world’s No. 4 biggest currency trader, in a note. “Our aggressive forecasts may still be under-stating the level of weakness.”