Daily Archives: May 21, 2016

Our 21 Lehman Systemic Risk Indicators are on the Rise

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Over the last year, the U.S. Dollar has been a global wrecking ball.  Since 2007, there’s over $10T of new dollar denominated debt on earth.  As the Federal Reserve has kept interest rates near zero for nearly eight years, global debt excesses have piled up, especially in emerging markets and commodities (oil) leverage.

Surges in the U.S. dollar now come with more global systemic risk than ever before.

If you’re trading stocks and not keeping a sharp eye on the dollar as well as policy hints coming out of the Federal Reserve, you’re sitting at the table at a disadvantage.

Pick up our latest Bear Traps Report here.

This week, U.S. Treasuries forged their biggest weekly decline since November.

Fedspeak (FOMC governors on the speaking tour) and minutes from the April meeting, brought back bets that policy makers will raise rates as soon as next month. The dollar soared and brought systemic risk back on the front page.

Bloomberg Dollar Index

  U.S. Trading Partner Total Trade 
China $626B
Canada $540B
Mexico $500B
Japan $199B
Germany $173B
South Korea $116B
United Kingdom $115B
France $79B
India $65B
Italy $59B
Netherlands $57B
Brazil $56B
Belgium $52B
Switzerland $51B
Singapore $51B

One of our key 21 Lehman systemic risk indicators has been focused on China’s currency.

At the Bear Traps Report, our passion is focused on helping our subscribers understand leading risk indictors.  There are always warning signs which take place just BEFORE large, elevator shaft like drops in the stock market.  As you can see below, China’s “currency devaluation moves” have occurred just before the last two 13-16% drops in the S&P 500.

CNY

In recent days, the Chinese yuan is on the dangerous devaluation train yet again (see above), be warned.

There are several reasons for this leading risk indicator’s effectiveness, join us here to learn more.

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Catalyst Dates, 10 Things You Need to Know

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Pick up our latest Bear Traps Report here

Market Moving Catalyst Events, Next Few Weeks into the Fed Decision
Sunday, May 22
•Cyprus will hold its parliamentary elections
•Austria will hold the second round of its presidential elections
•The AKP Party of Turkey will hold a meeting to choose the successor to Ahmet Davutoglu as Prime Minister
•The Greek Parliament is expected to vote on additional indirect taxation measures worth approximately 1% of GDP and on a contingency mechanism regarding the country meeting its primary surplus targets
Monday, May 23
•@ 5:30 a.m.: Federal Open Market Committee (FOMC) Member James Bullard Speaks on Monetary Policy
•@ 8:00 a.m.: San Francisco Fed President John Williams Speaks on Monetary Policy
•Federal Reserve Releases Data on Foreign Exchange Rates
•@ 10:00: Eurostat Releases Monthly Survey of EU Consumer Confidence
•@ 6:30 p.m.: Philadelphia Fed President Patrick Harker Speaks
Tuesday, May 24
•The Eurogroup will meet to review the completion of the first Greek bailout review.
•@ 10:00 a.m.: Census Releases Annualized Number of New Single-Family Homes Sold   During the Previous Month
•@ 5:00 p.m.: The House Natural Resources Committee is scheduled to hear opening statements in a Markup of legislation designed to address Puerto Rico’s financial crisis
Wednesday, May 25
•@ 10:30 a.m.: Energy Information Administration (EIA) Releases Weekly Data on Crude Oil Inventories
•@ 1:00 p.m.: Dallas Fed President Robert Kaplan Speaks
Pick up our latest Bear Traps Report here
Thursday, May 26
•Federal Reserve Releases Data on the Aggregate Reserves of Depository Institutions & the Monetary Base
•G7 Leaders’ Summit begins in Tokyo
•@ 4:00 a.m: European Central Bank (ECB) Releases Financial Stability Review
•@ 5:15 a.m.: Federal Open Market Committee (FOMC) Member James Bullard Speaks
•@ 8:30 a.m.: Department of Labor (DOL) Releases Weekly Unemployment Claims
•@ 10:00 a.m.: National Association of Realtors Releases Monthly Pending Home Sales
•@ 12:00 p.m.: Rep. Mick Mulvaney (R-SC) and R Street will host a Capitol Hill Conference on the future of housing reform and Mulvaney’s legislation to recapitalize the GSEs
•@ 12:15 p.m.: Federal Reserve Governor Jerome Powell Speaks on Monetary Policy
•April durable goods orders. Sales of big-ticket, long-lasting items such as dishwashers show consumers’ confidence and willingness to shell out big bucks.
Pick up our latest Bear Traps Report here
Friday, May 27
•Federal Reserve Releases Data on the Assets & Liabilities of U.S. Commercial Banks
•@ 8:30 a.m.: Bureau of Economic Analysis Releases Annualized Quarter-on-Quarter GDP Numbers
•@ 10:00 a.m.: University of Michigan Releases Surveys of Consumer Sentiment and Inflation Expectations
•@ 10:30 a.m.: Fed Chair Janet Yellen will be honored at Radcliffe and questioned by Gregory Mankiw, a former Chairman of the President’s Council of Economic Advisors. The event will also feature reflections from former Fed Chair Ben Bernanke
Wednesday, June 1
•The ISM manufacturing report for May. Manufacturing has been in recession. In April, this key economic barometer surprised to the upside, reaching its highest level of the year.
Friday, June 3
•Jobs Friday: The government said only 160,000 jobs were created in April, 40,000 less than forecast. That makes the May jobs report critical, as the Fed will learn if the nation’s job-creation machine is slowing or revving back up. Investors will also get a look at how the sizable services sector of the economy fared in May.
Tuesday, June 14
•May retail sales. Many retailers reported weak first-quarter earnings, although Walmart bucked the trend early Thursday, posting better-than-expected earnings and boosting its second-quarter outlet. Retail sales overall, however, surprised to the upside in April, rising 1.3%. Will sales stay strong and relieve fears of consumers slamming their wallets shut?
Wednesday, June 15
•The Fed announces its decision on interest rates and Chair Janet Yellen explains why in a press conference following the release of the Fed’s policy statement.
Pick up our latest Bear Traps Report here
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