Boiler Room: The Official Stock Market Discussion
Futuristic Eskimo
All Star
Funding stress is appearing in the markets. Temporary or not?
I'm thinking this is more short term. Financials' balance sheets are quite strong and I don't see anything brewing on the scale of 07.
@James Hurley
I'm thinking this is more short term. Financials' balance sheets are quite strong and I don't see anything brewing on the scale of 07.
@James Hurley
Domingo Halliburton
Handmade in USA
Where would you say you're seeing this?
Domingo Halliburton
Handmade in USA
Risk off with big NQ names like FB, RTY and XLE seemingly leading the way, tariffs looking like they're happening, not a good mix for this market.
Futuristic Eskimo
All Star
Libor-OIS Blowout Has Citigroup Eyeing More Negative Effects
By
Liz McCormick
March 20, 2018, 8:09 AM EDT
The recent blowout in one of the financial market’s key short-term borrowing indicators may be more a product of technical factors than banking stress, but the negative effects are likely to spread as the gauge deteriorates further, according to CitigroupMarch 16 that there may be some short-term narrowing of the spread, yet further out Citigroup continues to expect widening pressure.
The spread widened again Tuesday as Libor plowed higher for a 30th straight day. Three-month dollar Libor was at 2.25 percent, its highest level since November 2008, a time when global financial markets were in turmoil.
The widening has so far had little impact on the cross-currency basis, which has traditionally been linked to Libor-OIS, but the Citigroup expect that the pressure will spread there. Though this could be positive for euro-denominated credit, it’s “likely to be more than offset by the global negative,” wrote the strategists, who are bearish on credit markets as a whole.
Libor “is still the reference point for the majority of leveraged loans, interest-rate swaps and some mortgages,” wrote King and Kang.
A rise could also have a less direct impact through wealth effects as “higher money market rates and weakness in risk assets are the two conditions most likely to contribute towards mutual fund outflows,” they wrote. “If those in turn created a further sell-off in markets, the negative impact on the economy through wealth effects could be greater even than the direct effect from interest rates.”
Gone up again the last couple days.
Domingo Halliburton
Handmade in USA
I did see something about this. I mean these guys know how to hedge, right? But i would wholly agree with that last paragraph you quoted.
I'm surprised 2.25% is the highest since 2008. Although i guess it makes sense.
Futuristic Eskimo
All Star
Stress in the bank funding market creates more stress due to people getting worried about their counterparties. It's self-fulfilling. I don't see equities having much upside with this looming in the backround, even though they aren't directly related.
Would be interested to see how IG Financials credit has been performing with this going on. Anyone near a terminal?
Domingo Halliburton
Handmade in USA
I cant speak to financials but i thought high yield has been outperforming year to date. I cant say about any moves recently.
Domingo Halliburton
Handmade in USA
BofA analyst reiterated his buy rating for FB and a price target of $230 
($230 is lower then where they had it though)
($230 is lower then where they had it though)
Domingo Halliburton
Handmade in USA
thought the market would respond stronger to the tariff proposals
I'd say this is a pretty strong reaction.
levitate
I love you, you know.
Damn.
Watch the shyt go up 4% tomorrow.
This market has no idea what the fukk it wants to do.
Watch the shyt go up 4% tomorrow.
This market has no idea what the fukk it wants to do.
Domingo Halliburton
Handmade in USA
Well the nikkei is down 3.5%, futures here (ES) are down 15.
