The Wall Street Journal proclaims that “the trades that had proven winners in recent months backfired [in April] (alt)…The euro strengthened 4.5% against the dollar in April after tumbling 11% in the first quarter. The U.S. benchmark crude-oil price soared 25% after declining 11% in the first three months of the year. The Nasdaq Biotechnology Index fell 2.8% in April after jumping 13% in the first quarter. Yields on German government bonds bounced higher after nearing zero last week.” Furthermore, “the turnaround month ended with an exclamation point,” read: selloff in “suddenly vulnerable technology stocks.” Twitter, Yelp and LinkedIn are the culprits. “It is spring cleaning,” says one. “It’s a short-term unwind,” says another. “I’m convinced medium-term trends will re-establish themselves.” Nice. As you can probably tell, everyone is a bit “um, what?” about recent economic data. ICYMI, 1Q GDP came in at 0.2%, and people were all like “probably not a true reflection of the economy’s health, given the role of temporary factors such as the weather and the ports dispute.” Then, the impossible happened: “private sector pay rose 2.8 per cent in the first quarter (alt)…the quickest upward pace since 2008;” “personal spending rose 0.4% in March from February (alt)…the biggest gain since August;” “new claims for jobless benefits tumbled to a 15-year low” etc. “This is precisely why we told you to ignore the weak first-quarter GDP data produced yesterday. It’s old news. And the economy is showing”–cue Institute for Supply Management: “the pace of U.S. manufacturing growth held at its slowest in almost two years in April, as a rebound in new orders was offset by employment shrinking to its lowest level in more than five years.” Also, “U.S. construction spending fell in March to a six-month low…Economists polled by Reuters had expected construction spending to rise 0.5 percent.” Of course, the best head-scratcher of all is still with us: “consumer confidence increased in April to the second-highest level in more than eight years as Americans grew more upbeat about their financial prospects.” Meanwhile, 10 year Treasury prices have fallen nearly 8% since Wednesday.
Orientalism aside, this is pretty suspect: “After jumping by the maximum-allowed 44 per cent from the offer price when it floated in Shenzhen just a month ago, the stock has risen by the daily maximum of 10 per cent every day since…Every one of the 29 IPOs in Shanghai and Shenzhen this month have risen by the daily limit each day since. The worst performing IPO from earlier in the year has doubled in price.”
USA: P2P Derivatives
“LendingClub chief executive officer Renaud Laplanche said he’s aware of the interest to bet against the market. Derivatives that give investors the ability to protect against losses on the loans the company arranges is just smart risk-management, he said.”