Asian Stocks Explode to the Upside; Yuan Rises Most in a Decade

The NIKKEI is up more than 700 points or 5%. The Shanghai is off a bit, because they were on siesta last week celebrating monkies. And, Hong Kong is up more than 2%, lending to a fervent rise in the civilized world.

EuroStoxx futures are rallying by 2.77%, with Italian futures meatballing higher by 3.85%.

Here in the states, home of the New World Order, NASDAQ futures are higher by 40.

Gold is getting tea bagged by 1.25%.

Crude is off a smidge, 1%.

Portuguese-German spreads are flat at 329 bps.

Dollars are weaker v euros, by 0.3% and higher v the yen by 0.54%

You do see how all of this is intertwined, yes? If not, feel free to ask questions.

Most importantly, the PBOC are getting extra manipulative with their currency tonight, putting the yuan up by 0.9% to $6.517, representing the biggest one day jump since 2005.

The People’s Bank of China earlier raised the daily fixing against the dollar, which restricts onshore moves to a maximum 2 percent on either side, by 0.3 percent to 6.514, the strongest since Jan. 4. A gauge of dollar strength declined 0.8 percent last week, when onshore Chinese markets were shut for the Lunar New Year Holiday

The significance of this recent downturn should not be discounted. The MSCI is officially in a bear market–representing the sixth over the past 30 years. Very soon you will all bathe in wanton profits, become forgetful of the ruin you faced last week, and ignore the warning that was given to you here, by a Space Alien Magician (SAM).

Saying “sell the rallies” is a very generic and overarching statement. The question that is most important is “at which point during the rally should we sell?”

There is going to be fervent race for risk assets very soon. As you can see, already, SPY futs are trending higher.

For the month, the NASDAQ is off by 5.87%, in line with my 2008 and 2009 analogue. The upside in February is likely limited to 2%; but it’s very likely we’ll rally like bats out from hell come March. Starting in the month of March, the time of year when lads from the countryside drink themselves retarded under the sigil of St. Patrick, I am anticipating a gorilla raping run of 8-15%, which may last for almost 3 months.

A bull market of sorts awaits us, which will be laden with cocaine themed Wall Street parties and corks of champagne fired into the faces of the non-believers.

Near the very apex of the rally, half gorilla, half cro-magnon men will appear on the television to declare “the end of the bear market” giving the ‘all is clear’ sign, just before their brokerage accounts get detonated by the TNT of their own stupidity.

The respite you will soon enjoy will be matched with a misery not seen since the dark ages, beginning in the latter part of May. All long positions should be sold by late April to early May.

In the interim, try to enjoy this small pocket of pleasure, a token offering from the Gods, but remember the pain you felt last week while drinking yourselves to sleep.

Into this run, both FANG and TWDFM (these will definitely fuck me: TWTR, WYNN, DB, FCX, M) should work their way higher.

As for me, I’ll stick to the SPY buy programs generated by Exodus. As of Friday’s close, I was 100% invested, 75% SPY, 25% TLT.

I put together a group of stocks inside Exodus, under the acronym TWDFM (these will definitely fuck me), that are supposed to represent everything that’s wrong with the market. They are the proverbial risk assets, the ones that haunt you and keep you up at night. Your advisors scowl at you when you ask them to buy more of these stocks.

They are:

Twitter: Social media pariah
Wynn: Their China business has collapsed
Deutsche Bank: the systemic risk of this market
Freeport McMoran: Copper and oil assets coupled with $20 billion in debt
Macy’s: The mall is dead

On Friday, the median return for these stocks was +12%, representative of a very risk on tape. Conversely, the FANG stocks, Facebook, Amazon, Netflix and Google, were barely up. As a point in fact, year to date, the mean loss for the TWDFM stocks is less than the coveted FANG.

What does it all mean? Hedge fund favorites are getting blown out with reckless abandon, while the bottom feeders may have already seen its selling climax.

Food for thought.

Good news everyone: the Chinese government has released some positive economic data, not at all fudged, pointing to a sharp increase of retail sales during the past week of hedonistic ‘lunar new year’ celebrations, up 11.2% year over year.

The ministry statement said retailers firms grew to about 754 billion yuan ($115 billion) during the Feb 7-13 “Golden Week.”

In other orient related news, the head of the PBOC would like everyone to shut the fuck up about yuan devaluation and to please stop reading rumors of suchness.

Zhou added that there was no basis for the yuan to keep depreciating, and China would keep the yuan basically stable versus a basket of currencies while allowing greater volatility against the U.S. dollar.

The government also needed to prevent systemic risks in the economy, and prevent “cross infection” between the stock, debt and currency markets, he said.

Onward.

This is the most dangerous movie for investors since Gordon Gekko sat in his ridiculous red chair in the movie Wall Street. Being in the industry since 1997, I’ve encountered countless brokers/investors who’ve tried to emulated either Gordon Gekko or Bud Fox. I’ve even bumped into a few attorneys who thought they were James Spader, trying to find out “what’s in it for moi”?

The Big Short is a well done movie. Steve Carroll stole the show, in my opinion–playing the competent, but rebellious, angry man who was pissed at the lunacy that was transpiring at the big banks and mortgage market. That’s all well and good–but I am sure this movie is going to inspire scores of impressionable child-men into thinking they too can find “the next big short” and instead find themselves BLOWING themselves into smithereens.

If you are a strong minded man and not easily swayed by moving images with voices, feel free to watch this movie over a bag of popped corn. However, if you’re one of those guys who screams out “Bluehorse shoe loves XYZ” after buying XYZ, with your hair slicked back, sitting in your bullshit red pleather chair from staples, avoid this movie like the plague.

These analysts are so reactionary. Should the market go on a gorilla run higher, they’ll all be upping their targets for the S&P. However, now that it’s fashionable to sound doomful at cocktail parties, these fucking guys are slashing targets.

Truth be told, I think stocks go lower this year, so slashing targets is a good thing–for their pathetic careers. However, they’re doing it from a position of weakness, after the fact, Johnny come lately, losers.

While the bank’s new target implies a 7.7 percent advance from the current level, it’s 9 percent lower than the prior target of 2,200. It also implies that the gauge will fall for two consecutive years for the first time since the dot-com era.

“Unless we see signs of a growth recovery, there may be significant near-term downside to current levels,” the group, led by Savita Subramanian, wrote in a note to clients Friday. “The S&P 500’s move this year has been extreme, worsened by the dearth of liquidity in financial markets amid the tightest regulatory backdrop of our careers. This lack of liquidity could exacerbate downside risk potential.”

Subramanian is now the eighth strategist of 21 followed by Bloomberg to reduce a forecast this year. The new level leaves her as the least-bullish in the survey along with JPMorgan Chase & Co.’s Dubravko Lakos-Bujas. The 2,000 target is 8 percent below the median of 2,175.

Analysts.

Shares of ICPT are through the roof, after reports surfaced the company might be shopping itself. For me, this is very low brow shit, especially since the stock has been decapitated in recent months. Nevertheless, maybe they’ll be able to hoodwink GILD or ABBV to pay them absurd amounts of coin for a drug in development.

The drug in question can reverse cirrhosis of the liver, allegedly.

The U.S. Food and Drug Administration has scheduled an advisory committee to review the company’s obeticholic acid oral tablets for the treatment of primary biliary cirrhosis on April 7.

A major untapped market for the medicine, however, is non-alcoholic steatohepatitis, which analysts estimate may reach $35 billion in sales. The company is collecting data needed to win approval to treat the condition in final studies involving as many as 2,500 patients for 72 weeks.

ICPT is down 58% over the past 9 months, like an evil baby.

This is a great way to close out the week, with the annihilation of overzealous bears. It made no sense to be short stocks, into what appeared to be a very obvious end to western civilization.

NOTE TO SELF: Western civilization never ends, especially when it seems to be ending.

Markets are higher by 300 and the hallowed halls of Exodus called the rally, yet again. The free trials end tonight, so sign up now to get a 5-day pass to the best market intelligence platform the world has ever known.

We get to enjoy a 3 day weekend, thanks to President’s Day. The work never ends here, at iBankCoin. Boot camp begins Monday! Please join Jeff Macke, Jeff Kohler and Raul for a week of in-depth discussions about the market and what trades might make sense in the coming weeks ahead.

The school girls are out in force today, supporting Janet Yellen’s decision to purposely drain the world of liquidity. Steve Liesman is out shooting nerf bullets at the negative GDP camp today, suggesting that the numbers are going way up.

I am bored of the horseshit coming out from Liesman. The economy hasn’t outperformed in a decade. However, for some oddball reason, whenever one piece of positive data comes out, Steve and his school girlfriends crawl out from under the stairs to say GDP is going up, how it can grow at 4%, yadda, yadda, yadda.

It never happens.

Nonetheless, if this Russian style form of propaganda can boost my SPY higher, so be it.

This is a solid gain, despite just 73% of stocks trading higher. We have the banks and materials leading the way, with bonds and gold selling off.

This recent downtick has several key elements that are the proverbial stars, or poster children, of this whole mess. It stems from the commodity bust, bad banks making bad bets, China, retail getting annihilated by Amazon (death to the mall), and the social media bubble being let out.

If forced to choose five stocks that represented the overall risk appetite of the market, I’d go with Twitter, Deutsche Bank, Wynn Resorts, Macy’s and Freeport McMoran.

Sorry, they don’t Voltron up into a convenient FANG like fucking acronym for your small brains to memorize. But these five stocks are the horsemen of our time.

They’re all raging higher.

TWTR +9%

FCX +15%

M +2.8%

I guess you can call them TWDFM if you like, after “These Will Definitely Fuck Me”. They are the opposite of FANG, the Mr. Glass of this story. But they need to go higher if we’re to escape the wrath of the seemingly endless negative feedback loop.

But they’re built to hurt you. You know how the story ends. Villains always lose.