The raise of uncertainity

Posted: December 2, 2016 in Uncategorized

As the Trump reflation trade continues, the uncertainty starts to creep up all over the world. A quick and not exhaustive points

USA

-tax reforms will be hard even with a Republican sweep

-USD $5 trillion new spend (tax and infrastructure) – where they come from

-the idea of public private infrastructure in the US as usual failed – projects went into bankruptcy or had to be bailed out from the Government

-higher yield is putting pressure on US Debt and US Dollar strength

-Trump conflict of interest (and putting in charge of his assets his chidren does not suit the definitition of blind trust)

China

– It starts to be aggressive in curbing outflow of capital – limiting offshore financing, offshore M&A, offshore investments and offshore shareholding changes

Europe

-Italy referendum  and Austrian election

-ECB promised to intervene in case of Italian issues, but the Wall Street Journal siad that intervention is not calibrate to respond to a sustained sell off

Oil

-Various fonts highlighted as usual OPEC nation do not respect the OPEC Statements. Russia cannot freeze production for technical reasons (the oil wells would freeze)

Market

The NASDAQ sell off continues and it cannot be much longer before it overwhelms the situation.

While the market in general did not sell off, the institutions are starting selling

The Volatility Index jumped 5.55%

The 30 years bond yield spiked another 10bps..starting to be in a danger territory also for equities

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