This is the prelude to a GLOBAL reset
Bloomberg World Index
Moving averages rolling over
Down 17% in 12 months
Support about to be broken pic.twitter.com/7GJESjY4O9
— OCCUPY WISDOM (@OccupyWisdom) December 10, 2018
NEW LOWS IN SMART MONEY FLOW INDEX…
Via @zerohedge pic.twitter.com/GjdJkMNkK9
— OCCUPY WISDOM (@OccupyWisdom) December 10, 2018
Oops! Yield on Deutsche Bank Coco Bond jumps above 12%, highest since 2016. pic.twitter.com/NcpAmrMB0K
— Holger Zschaepitz (@Schuldensuehner) December 10, 2018
TROUBLE for this weeks ECB meeting. Financial conditions in the Eurozone have dropped to lowest since 2016. pic.twitter.com/I7RnyUAp6g
— Holger Zschaepitz (@Schuldensuehner) December 10, 2018
South Korea exports of semiconductors are now down -5% YoY. $SOXX pic.twitter.com/fHdrPDaRf8
— Greg S. (@GS_CapSF) December 10, 2018
šŖšŗš£$EUR: timberrr!
Sentix expectations collapsed in December. Suggests substantial downside risks to Euro-area growth. pic.twitter.com/4Xe2nTxRSM
— Martin Enlund š¦š (@enlundm) December 10, 2018
Different indexes top at different times. In this cycle we saw the following indexes too at different times:
1/ #NYSE COMPOSITE 1st
2/ #NASDAQ 2nd
3/ #SP500 and #DJIA 3rd pic.twitter.com/gVbx2AUV8F
— OCCUPY WISDOM (@OccupyWisdom) December 11, 2018
we must ask ourselves: how will investment grade credit spreads stop widening? pic.twitter.com/3q10nERGfV
— Alastair Williamson (@StockBoardAsset) December 10, 2018
''Keep an eye on Deutsche Bank. That is one sick puppy'' – @TruthGundlach $DB pic.twitter.com/lslKO8f62g
— Marc-AndrĆ© Fongern (@Fongern_FX) December 10, 2018
BofA Head Of Global Rates: “I Have Not Been This Worried Since 2008”
At roughly the same time Bank of America’s bearish Chief Investment Strategist, Michael HartnettĀ laid out 9 signalsĀ that the market has finally bottomed, andĀ another 5 that the bottom is a lot lower, one of his BofA peers, David Woo, head of the bank’s global rates and currency and EM fixed income and econ research, revealed an even more dismal outlook, telling Bloomberg TV thatĀ he is the most worried about volatility inĀ global markets – particularly in the developing world – since the 2008 financial crisis.
According to Woo, the Democratic takeover of the HouseĀ will weakenĀ Donald Trumpās hand on trade,Ā making a deal with the Chinese less likely, while spurring a bruising fight over the U.S. debt ceiling. According to Woo, the ceiling will need to be raised sometime probably in the summer, but to agree to that, the Democrats will demand some kind of concession before offering the votes in the House, and it’s very possible that the two sides will have zero common ground.
Furthermore, according to theĀ Bank of American, the 2020 election will be in full swing by that point, putting pressure on the Democrats not to deal, which is why even though the upcoming debt ceiling fight is a risk that few people are focused on, he believes it is time to start getting worried.
Looking back to the last debt ceiling crisis, in 2011, Woo notes that “brinkmanship literally took the country to the verge of default and culminated in the U.S. losing its AAA credit-rating status.Ā That year we saw more volatility than we can remember. I think 2019 could turn out to be a little worse.”
“The only thing Iām confident in is volatility will be high next year.”
Meanwhile, it is unlikely that any of the “legacy” problems will have been resolved by then:
“Weāll have a $1 trillion budget deficit, a big fight over the debt ceiling, gridlock and the U.S. economy will be slowing at the same time,” Woo told Bloomberg TV. “That makes me very nervous.”
Separately, speaking about his core specialty, emerging markets, Woo said that he wouldn’t touch emerging markets “with a 10 foot pole”, to wit:Ā “You want to buy EM? I wouldnāt touch EM with a 10-foot pole until thereās a resolution between the U.S. and China.” Emerging-market equities, of course, followed China into a bear market earlier this year amid the escalating trade war between Washington and Beijing.
In summary, while reluctant to make any forecasts about the coming years, Woo said thatĀ “the only thing Iām confident in is volatility will be high next year.”