Europe Reverses Big Gains, Oil Down, U.S. Futures Dive, Dive, Dive

Everything was supposed to be different. European markets were soaring at the open, up more than 1.5%. Oil was higher and U.S. futures were up triple digits. All of that, and more, has dissipated. Now investors are being offered the rack or the Catherine wheel at the open.

Dow futures are lower by 120.

European markets are bleeding out.

Oil is lower by 1% and gold is, once again, higher to the tune of 1%.

Oh, and the dollar is getting hammered again too, currently at 3 month lows v the euro at 1.12.

The new CEO, Stefan Larson, at RL just made himself look retarded by blaming poor earnings on everything but the fact that he’s a giant ape and doesn’t know what he’s doing yet. Just last quarter investors were encouraged to see olde Ralph get the fuck out of the stores, him and that stupid double breasted blue blazer with gold buttons. But with numbers like these, we might as well bring Mr. Powdered white wig back to drive RL into the ground for good.

Reports Q3 (Dec) earnings of $2.27 per share, excluding non-recurring items, $0.16 better than the Capital IQ Consensus of $2.11; revenues fell 4.3% year/year to $1.95 bln vs the $2.03 bln Capital IQ Consensus; -1% ex-FX.

This was below the guidance provided in November of 0-2% reported revenue growth. While international net revenue grew 6% in constant currency in the third quarter, North America revenue declined 4% primarily due to above-average temperatures for most of the Fall and Holiday period, a decline in foreign tourist traffic and product assortment challenges in the Lauren brand. The decline in reported net revenues included ~300 basis points of negative impact from FX.

Co issues downside guidance for Q4, sees Q4 revs of flat to -2% to ~$1.85-1.95 bln vs. $1.96 bln Capital IQ Consensus.

Operating margin for the fourth quarter of Fiscal 2016 is expected to be ~400-450 basis points below the comparable prior year period, primarily due to proactive action the Company is taking to clear end-of-season inventories related to the sales challenges the Company faced in the third quarter, as well as infrastructure investments and negative foreign exchange impacts.

Co expects consolidated net revenues for Fiscal 2016 to be up ~1% in constant currency and down ~3% on a reported basis. This compares to previous guidance of flat on a reported basis and up 3-5% in constant currency. Adj. operating margin for Fiscal 2016 is now expected to be down 290-320 basis points (from down 180-230 bps).

This stock, potentionally, has a long ways lower–because of FX headwinds, crappy tourists and poor assortment of clothes of course.

Shares of CS are getting hammered on wider than expected losses, generally playing themselves in the biggest way possible.

“We have a clear strategy, clearly we are implementing it in difficult markets and our outlook for the first quarter remains very cautious,” Thiam told an analyst call.

“(We have) very unique market conditions and they are challenging, but fundamentally we are maintaining the objectives and the targets we have presented”.

Four months on from when Thiam set out his strategy, many analysts are still unsure how Credit Suisse will hit growth targets, which include more than doubling Asia Pacific pretax income by 2018.

The bank posted a 2015 net loss of 2.94 billion Swiss francs ($2.92 billion), worse than the median estimate of a 2.12 billion loss in a Reuters poll.

It booked a goodwill impairment charge of 3.8 billion francs in the fourth quarter as a result of the new strategic direction Thiam is pursuing.

The impairment was mostly related to the acquisition of U.S. investment bank Donaldson, Lufkin & Jenrette in 2000, it said.
The lender said it saw net outflows of funds in two of its three main wealth management divisions during the period, though it target market of Asia Pacific was the exception.
Rival UBS this week announced its best annual results since 2010 although it also saw an outflow of funds and weakening margins at its flagship wealth management business.

JP Morgan Cazenove analysts called Credit Suisse’s results “very messy”, noting an underlying loss before tax versus market expectations of a profit. The bank’s common equity tier 1 capital ratio of 11.4 percent also lagged consensus even after a 6 billion franc capital raising last year, it noted.

Do not concern yourselves with the fact that European indices are well off their highs, or that our futures have been walking down the past 2 hours (I never sleep. I am omnipresent).

The physician of the stock market, Dr. Copper, is telling you to chill. Everything is going to be alright.

The head physician in Doctor Copper’s hospital is Dr. Freeport McMoran. He’s been in surgery all week, removing the brains of his patients. The stock has been recovering and might be digging itself out of a scary debt crisis hole.

You are just a layman. These gentlemen are trained physicians. Sit back, relax, and enjoy the capital gains that will come.

According to court documents today, Martin’s E-trade account has plummeted by 90%, or $41 million, to a mere $4 million.

Granted, this pittance of $4 million is more than what 99% of people on planet earth will earn in their lifetimes; it may pose as an issue for his freedom, however, as his $5 million bail was secured against the value of his account.

His attorney, Benjamin Brafman, who will likely take the balance of the account for his time defending Marty, said they’d figure out ways to supplement the account–if need be.

That is all.

This is some seriously funny shit. After watching this video, I felt like drowning myself in a vat of pigs grease. In classic form, Schiff lays waste to the token bull, who doesn’t seem to know or understand how to contain this bearish animal on the war-path making outrageous, yet logical, conclusions.

This is bear porn if I’ve ever seen it. It has everything a burlap wearing, blue blazer, gent would expect from a man whose sole purpose in life is to oversee the complete destruction of civilization as a whole, just so that he could say “I told you so.”

Stocks will go way down.

Bubble, bubble, bubble.

Bear market.

We’re in a recession.

Economy has been decimated.

This will be way worse than 2008.

People are living with their parents (lolz).

U.S. rates will be negative and lower than europe.

Throwing gasoline on a fire.

It goes on and on and on.

Fund managers are ‘enjoying’ elephantine redemption claims, many of which are emanating from the east. They set up wealth funds to prepare for a rainy day. According to the CEO of Aberdeen Investments, who endured $13.2 billion in redemption claims in the fourth quarter alone, sovereign wealth funds are under pressure due to oil and have been pulling money out of the market. Back in November, the head golfer in chief at Aberdeen, Martin Gilbert, said 2016 would be rough sledding if oil persisted in the $45-50 range. Now that oil is in the low $30’s, I am certain he wants to shoot himself out from a carnivale cannon.

“Sovereign wealth funds were set up for a rainy day and that rainy day has arrived,” Aberdeen CEO Martin Gilbert said on a conference call in January.

Franklin Resources were the biggest losers, shedding more than $20 billion in the fourth quarter (a new record, congrats assholes!), most of which were in passive funds–the sort of bullshit that loses people large swaths of cash when markets get tough.

The winners were Blackrock and Doubleline, adding an astounding $152 billion and $54 billion in 2015, respectively–both for totally different reasons. Blackrock has an array of ETFs and products that help investors hedge out or gain exposure to safe-haven products, whereas Doubleline is run by Jeffrey Gundlach, boss of all bosses, outspoken opponent of the retarded U.S. Federal Reserve.

The corrupt Shanghai is higher by 1.1% and the Hang Seng is up 1.5%–providing Asian investors with a calm normality–like the awkward silence after being beaten to a complete pulp.

On the loss column are the Japanese, with the NIKKEI lower by 0.3%.

DAX futures are indicating a bare knuckled punch to the jaw to short sellers, up 1.8%. S&P futures are higher by 12 and crude is up 1%.

It’s looking like a risk on session.

Year to date, the worst performing markets are: Shanghai-20%, FTSE MIB -18.7%, IBEX 35 -13% and the DAX -12%.

On the plus side: BIST 100 +3%, IDX composite +1.5%, IPC +0.65%.

Over $5.5 trillion in bonds are trading with negative yields. The media will tell you a dozen reason as to why Ireland, and for the love of God, Italy deserve to trade with negative yields; but none of them can see the forest through the trees like I can.

Seema Moody tries to make sense of it, but fails to grasp what it truly taking place here.

It’s the end of the world, mates.

Might I introduce you to a Mr. Devil Dog to explain the current situation we find ourselves in?

Indeud.

Bloomberg did some digging into what the breakeven points for extracting oil in Texas were and the Eagleford shale came out a winner. These fuckers aren’t interested in shutting in wells. Instead, they’re shifting to lower cost well sites and scheming up ways to produce with lower costs.

We will be swimming in oil for the foreseeable future.

Some Eagleford Shale plays include CHK, SN, JPEP, DVN, CRZO, MTDR, PXD, COG and SM.