Oil Grabs a Quick 5% to the Upside

Crude trades like a penny stock now.

WTI is higher by 5% now and a sundry of small, piece of shit, oil stocks are surging higher. Names like OAS and LEI will beat bears senseless with the buckle end of the belt today–mainly because it’s Friday.

NASDAQ futures are indicating unmitigated joy at the open.

The fact that we are to monitor every Fed speech, even assholes from Kansas, has me sick to my stomach. These people are incorrigible and beyond reproach. The audacity and self aggrandizement of the Federa Reserve is at a level that has never been seen before. It’d as if they had total control of the U.S. economy and our legislators were on permanent vacation.

When was the last time we heard anything from the fiscal side? It’s financial engineering all day, every day.

At any rate, the most important Fed head, next to Yellen, gave a speech at the University of Bridgeport (really?) today, citing disinflationary pressures and the need to chill the fuck out on the rate hike, or ‘normalization’, rhetoric.

Futures extended their gains on this news.

“I judge that a cautious and gradual approach to policy normalization is appropriate,” said Dudley, a close ally of Fed Chair Janet Yellen and a permanent voter on policy.

Caution, he added in a dovish tone, is needed “because of our limited ability to reduce the policy rate to respond to adverse developments, recognizing that we could also use forward guidance and balance sheet policies to provide additional accommodation if that proved warranted.”

“Although the downside risks have diminished since earlier in the year, I still judge the balance of risks to my inflation and growth outlooks to be tilted slightly to the downside,” he said at University of Bridgeport.

Low oil and commodity prices “may signal more persistent disinflationary pressures than I currently anticipate, while renewed tightening of financial market conditions could have a greater negative impact,” Dudley said, while “there is significant uncertainty about economic growth prospects abroad.”

Happy Friday.

Italian stocks, led by banks, are surging today on news that a ‘bad bank’ fund will be established and launched as early as Monday.

Here are the to gainers in the eurostoxx 50 now.

While this plan has been known for sometime now, it’s launch date was always in question. The fact that this Italian fund might be ready as early as Monday, investors are using that element of surprise to their advantage by roasting short sellers on the spigot.

Dow futures are up 85.

The boozehounds over at Moody’s concocted a number, seemingly while intoxicated, suggesting that under a dire scenario, banks would only need $9 billion to get back up to snuff with capital requirements.

“Yes, the sector is troubled,” said David Fanger, a Moody’s senior vice president and author of the report. “It will generate losses. But it’s not so large that it will blow a hole in the banks’ assets.”

With close to $400 billion in distressed oil and gas loans and recovery rates at just 20%, my instincts tell me this $9 billion number can grow should a ‘severe’ scenario materialize.

Is this even relevant? As I watched this, I thought to myself  ‘gee, this guy is somewhat dimwitted and lacks energy’ (extra Trump). He’s not telling me anything worthwhile, but maybe it will help some clown out there who thinks the fucking world is a giant rainbow with unicorns committing acts of fellatio on it.

It’s mid-evening, so I figured now was the time to attempt to scare you, in order to deprive you of sleep. I understand a great many of you are long stocks, myself included. With that in mind, have a look at this (extra Large Marge)!

To put that chart into actual numbers, here are the returns of the HYG v the XLF. Notice how wide that divergence is year to date.

That’s almost a 10% differential! You people are smoking large bags of heroin if you think buying some dumbfuck oil pipeline company is a better investment than JPM or GS.

A reckoning is coming.

Julian Emanuel is an Executive Director (ooh, fancy title) at UBS, which means that he thinks he knows more about everything, stemming from stocks to cocks, because he works on the VIX line all day long. At any rate, I entered into this video with an open mind and left feeling unfulfilled. He’s calling for a higher VIX. He cites the disconnect between GDP expectations and the stock market run. Correctly, he highlighted the failure of central bank overplanning (you can steal that too), yet only calls for the S&P to dive lower to 1,970–a mere 60 points or so from current levels.

In addition to that, he said markets will trade up by year end.

Wrong. The S&P will eclipse 1,970 in a single day, then proceed to throw people like Julian into fucking wooden barrels over the edge of Niagra Falls.

Moreover and inexorably so, equities will trade sharply lower by year end, much lower than most people ever thought was possible.

Do not be fooled by the Clinton position against the BlackLivesMatter vagrants. This is a calculated plan to curry the favor of moderate to right leaning democrats and white males. Upwards of 75% of black Americans will vote for Hillary, even if she gave her speeches in Klansman garb. Nonetheless, I found this exquisitely entertaining.

BONUS ROUND: Shots fired at Obama…again.

The man manages $95 billion, was inspired to become a money manager living in a hovel while watching Lifestyles of the Rich and Famous, and has outperformed 99% of his peers.

What the fuck have you done lately?

“The negative interest rate experiment seems to be backfiring,” said Gundlach, who helps oversee $95 billion for Los Angeles-based DoubleLine. “The best evidence of negative interest rates backfiring is the yen versus the dollar and the Nikkei.”

The dollar was last down 1.4 percent at 108.01, its biggest daily percentage drop in two months. The decline put the greenback’s losses at about 10 percent for the year.
Gundlach said: “Negative interest rates are not just deflationary, they are deflation. You lose money.”

NASH drugs are the next blockbusters and ICPT is at the forefront of the science.

In my opinion, this company gets acquired within the year.

FDA approval means a sharply higher open for ICPT tomorrow.

The FDA’s Gastrointestinal Drugs Advisory Committee votes 17-0 backing approval of Intercept Pharmaceuticals’ (ICPT) obeticholic acid (OCA) for the treatment of primary biliary cirrhosis (PBA), accepting the use of the liver enzyme alkaline phosphatase (ALP) as a surrogate endpoint.

French drug maker, Genfit (GNFTF) should get some sympathy love, and maybe GALT.