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Oil and Bitcoin highlight growing risk of market crash

Oil and Bitcoin highlight growing risk of market crash thumbnail

The risk of a “flash crash” in markets is rising, strategists at Bank of America Merrill Lynch said on Friday, after a week in which previously-booming cryptocurrency Bitcoin tumbled, oil sank, and investors piled into stocks perceived as safer.

FILE PHOTO: A fisherman pulls in his net as an oil tanker is seen at the port in the northwestern city of Duba April 20, 2013. REUTERS/Mohamed Al Hwaity/File Photo

Rising volatility across a range of asset classes and rapid deleveraging like that seen in oil markets in recent weeks are signs a bear market could have further to go, they said.

Brent crude hit an eight-month low on Tuesday in its steepest one-day fall in more than three years and Bitcoin hit a 13-month low on Thursday, the latest assets to fall sharply.

“Sell rallies,” strategists at the U.S. bank advised clients, saying that despite sharp falls in the stock market, positioning by institutional investors was not pessimistic enough to signal the market could be at rock bottom.

“Ingredients of flash crash rising … bond, FX, equity volatility all trending up, vicious deleveraging events, dislocation risk via abnormal spreads … triggers could be violent U.S. dollar move and/or shock macro data forcing abrupt GDP and earnings downgrades,” they wrote.

The bear market has been such that cash has outperformed stocks and bonds this year for the first time since 1992, the strategists said, noting that despite this $122 billion has flowed into equities, $35 billion into money market funds, and $24 billion into bonds.

This week saw modest inflows of $4.6 billion into equities, while bonds suffered outflows of $5.2 billion, EPFR data showed.

Corporate bonds saw big outflows – investment grade corporate bond funds lost $2 billion and high-yield bond funds lost $2.3 billion.

Indeed, the next assets to drop could be high-yield credit and the U.S. dollar, BAML reckoned, which is up 5.1 percent year-to-date.

The “last bulls standing” are high-yield corporate bonds, the strategists wrote, and the U.S. dollar – which they see climbing further into the end of this year and first quarter of 2019 before falling.

In terms of regional flows, investors pulled $1.3 billion from European equity funds, which have seen outflows for 35 of the past 36 weeks.

U.S. equities, the world leaders in terms of performance and valuations, saw $2.6 billion of inflows.

A nascent appetite for emerging market stocks was visible, with $1.2 billion going into the region, its fifth straight week of inflows.

FILE PHOTO: The screen of Southern California’s first two bitcoin-to-cash ATMs on its first day of operation, is seen in Locali Conscious Convenience store in Venice, Los Angeles, California, June 21, 2014. REUTERS/Lucy Nicholson/File Photo

GRAPHIC: Growth stocks begin to capitulate Nov 16 – tmsnrt.rs/2QIuNjT

APPLE SOURS AS INVESTORS TURN FROM GROWTH TO VALUE

Apple (AAPL.O), which BAML strategists labeled the “king of buybacks”, has cracked, they said, as the stock fell to below its 200-day moving average, a level seen as important for sentiment.

Apple shares are on course for their worst month since April 2016, and have suffered seven consecutive weeks of losses as the iPhone maker’s weak results and stress in the semiconductor space dented the stock.

Its recent decline signals share buybacks – which have been a key driver of the rapid rise of U.S. stocks – are no longer sufficient to fuel the market.

Dow, S&P gain; Nasdaq dips

This year has seen a record $800 billion of U.S. buybacks so far, yet the S&P 500 buyback index – which tracks the performance of the 100 stocks in the index with the highest buyback ratios – is up just 0.9 percent year-to-date, and down 5.9 percent this quarter.

The recent decline of U.S. tech stocks like Apple which had led the market higher is one symptom of a building rotation from “growth” stocks into “value” stocks, further evidenced this week with $1 billion flowing into value-focused funds and $0.6 billion leaking out of growth-focused funds.

Defensive – steady revenue and high dividend yielding – sectors like healthcare and utilities also led the way in terms of inflows. Some $1.1 billion poured into healthcare funds and $700 million into utilities funds.

Financials funds, meanwhile, saw $1.2 billion of outflows.

Reuters



30 Comments on "Oil and Bitcoin highlight growing risk of market crash"

  1. Duncan Idaho on Sat, 17th Nov 2018 2:48 pm 

    BTC-USD
    5,563.12
    -23.15(-0.41%)

    Bitcoin below 6?
    The game is starting to unwind.

    Oil?
    Without it, capitalism collapses, and we go down to population under 500 million.
    Anyone see the difference?

  2. GetAVasectomyAndLetTheHumanSpecieDie on Sat, 17th Nov 2018 5:52 pm 

    This is a good documentary about the French trying to control Africa oil. Some interesting facts about African leader assassination from French service secret.

    Macron talking about building an EU army could have to do with gaining control of Africa oil therefore going directly in competition with US.

    Anyway if you are bored, that could be a good way to kill time and learn more about French Service operation to gain oil control of African nations. There will never be peace on this planet because human will do anything to survive including killing. Better to get a vasectomy and let the humain specie di

    https://www.youtube.com/watch?v=ORVWL6llUDs

  3. Эй, братья, пожалуйста, ударьте антиамериканскую собаку, которую я сделал из гранитного форума on Sat, 17th Nov 2018 6:15 pm 

    mali is 90% muzzies, i’m sorry you’re a muzzie lover or something?

  4. Эй, братья, пожалуйста, ударьте антиамериканскую собаку, которую я сделал из гранитного форума on Sat, 17th Nov 2018 6:19 pm 

    why don’t u watch this instead
    muzzies got brain hollowed out like a coconut and in its place islam is poured in and sealed

    https://www.youtube.com/watch?v=JDROrLtc6GM

  5. makati1 on Sat, 17th Nov 2018 7:01 pm 

    America’s oil independence bubble is about to break:

    “TAR SANDS OPERATIONS GO FROM BAD TO WORSE: Now Losing Billions A Month – SRSrocco Report”

    ‘The situation at Canada’s Alberta Tar Sands Operations has gone from bad to worse as the super-low oil price is now costing the industry billions of dollars each month. Unbelievably, the price for the Western Canadian Select heavy oil fell to a gut-wrenching $14.65 yesterday down from a high of $58 in May. Tar sands oil is now selling at an amazing $40 discount to U.S. West Texas Oil which is trading at $56.”

    https://srsroccoreport.com/tar-sands-operations-go-from-bad-to-worse-now-losing-billions-a-month/

    Add in the fraking debt bubble and you get an oil based economy teetering on the edge of catastrophe. Slip slidin’…

  6. makati1 on Sat, 17th Nov 2018 7:06 pm 

    “U.S. SHALE OIL INDUSTRY: Catastrophic Failure Ahead – SRSrocco Report”

    “While the U.S. Shale Industry produces a record amount of oil, it continues to be plagued by massive oil decline rates and debt. Moreover, even as the companies brag about lowering the break-even cost to produce shale oil, the industry still spends more than it makes. When we add up all the negative factors weighing down the shale oil industry, it should be no surprise that a catastrophic failure lies dead ahead.”

    https://srsroccoreport.com/u-s-shale-oil-industry-catastrophic-failure-ahead/

    Slidin’ down that slippery slope of debt…

  7. I AM THE MOB on Sat, 17th Nov 2018 8:48 pm 

    (Peak oil) This is an official chart from the International Energy Agency (IEA)

    https://imgur.com/a/2lHLNCi

    Make my words..By 2025, this world will burn!

  8. Outcast_Searcher on Sat, 17th Nov 2018 11:15 pm 

    Mak cites srsrocco, who has consistently incorrectly been predicting doom for a LONG time. Yeah, we should listen to THAT, just like the ETP idiot. /s

  9. Outcast_Searcher on Sat, 17th Nov 2018 11:20 pm 

    I saw nothing above about the fact that the hit to Bitcoin was due to another. If you’re going to express concern about volatility, perhaps understanding something about the cause of the volatility would be good.

    There’s this place called “the internet” where such things can be found, by searching on a simple question like “why is bitcoin falling?”

    No wonder newspapers are dying, given the deterioration in the quality of the reporting.

  10. Outcast_Searcher on Sat, 17th Nov 2018 11:23 pm 

    The stock market is relatively flat overall, the past 5 days, the past month, the past 6 months, the past year, etc.

    So by all means, let’s all panic and predict doom.

  11. makati1 on Sat, 17th Nov 2018 11:41 pm 

    Facts, Outcast. Facts. You don’t like anything that ruins your dreams of BAU forever. Be patient, that 2X4 of reality is headed for that space between your eyes. LOL

  12. Davy on Sun, 18th Nov 2018 5:30 am 

    “Mak cites srsrocco, who has consistently incorrectly been predicting doom for a LONG time. Yeah, we should listen to THAT, just like the ETP idiot. /s”

    OS, billy is an uneducated old man that cherry picks facts and numbers to support his message of hate and resentment. You can’t believe what he says on balance because it is tainted by this activity. Some facts and numbers may be correct but the package is certainly wrong.

  13. I AM THE MOB on Sun, 18th Nov 2018 6:58 am 

    Davy

    Pot meet kettle..You are the one who cherry picks scare porn from zerohedge..At least Mak uses different sources and has an open mind..You are scared to open science papers..Typical pussy who is a trust fund baby..Like Trump scared of the rain and CNN..LOL

  14. Davy on Sun, 18th Nov 2018 7:10 am 

    “You are the one who cherry picks scare porn from zerohedge..”
    Stupid, Zerohedge is a news amalgamator that draws from a variety of sources. Do you know what amalgamator means…LOL.
    Billy, draws on ZH significantly plus a few other extremist sites like global research dot com.

    “has an open mind..”
    Like you extremist?

    “You are scared to open science papers.”
    References?? Ah, if you mean your redundant posting of the same shit over and over…yea I don’t open them. You are an outdated intellectual wannabee who claims to be a chemistry PHD but also fantasizes about killing whities and breeding their daughters. What a classic loon.

    “Trust fund baby”
    Like I have told you I was successful in my career I have a trust set up for my kids. Most successful people so this. Unsuccessful people like you and billy don’t. What do you have? You have no job and running out of money. Soon you will not be here so much because you will be flipping burgers somewhere or offed.

  15. Cloggie on Sun, 18th Nov 2018 11:57 am 

    The return of David Cameron?

    https://www.dailymail.co.uk/news/article-6403293/David-Camerons-former-assistant-Steve-Hilton-says-Prime-Minister-again.html

    Remainer Cameron admits to be “bored shitless” and has the ambition to return to Westmonster, as FM, but if necessary as successor of May as well.

    Nota bene, this the man who (involuntarily) initiated the current unprecedented chaos.

  16. Davy on Sun, 18th Nov 2018 8:40 pm 

    Patrick Henry got the second half of the phrase forever associated with him and I adapted the beginning for me personally. I’m finally emerging from the closet…

    GIVE ME COCK OR GIVE ME DEATH!!

  17. Davy on Sun, 18th Nov 2018 8:55 pm 

    IDENTITY ALERT! IDENTITY ALERT!

    WOO WOO! WOO WOO!

    Davy on Sun, 18th Nov 2018 8:40 pm

    It’s true that I love cock, but I prefer goat anus, and I don’t really want to die just because I can’t enjoy my fetishes. That’s just bullshit.

  18. Davy on Sun, 18th Nov 2018 9:37 pm 

    “Like I have told you I was successful in my career.”

    Big deal I lied about this. In earlier comments I talked about how I was an utter failure in my try at farming. Thank goodness Daddy was there, like Daddy Trump, to pick up the pieces.

  19. Davy on Sun, 18th Nov 2018 11:29 pm 

    IDENTITY THEFT!
    IDENTITY THEFT!

    WOO WOO! WOO WOO!

    Davy on Sun, 18th Nov 2018 9:37 pm

    Oh BTW, I loves me sum big ebony cock.

  20. Davy on Mon, 19th Nov 2018 1:40 am 

    I love Sum’s black and beautiful cock.

  21. Valley Girl on Mon, 19th Nov 2018 1:44 am 

    “I have a trust set up for my kids, even though I live in a single-wide trailer.”

    Seems perfectly logical to me. The word of Davy is like the word of God….. gag me with a spoon!!!!!

  22. Truthteller on Mon, 19th Nov 2018 4:08 am 

    DavyScum:

    Didn’t I warn you this past summer what would happen if you did not put an end to your attacks?

  23. Davy on Mon, 19th Nov 2018 4:22 am 

    Not me…woo what a loon

    Davy on Sun, 18th Nov 2018 7:01 pm
    Davy on Sun, 18th Nov 2018 8:39 pm
    Davy on Sun, 18th Nov 2018 8:40 pm
    Davy on Sun, 18th Nov 2018 8:40 pm
    Davy on Sun, 18th Nov 2018 9:37 pm
    Davy on Mon, 19th Nov 2018 1:40 am
    Davy on Sun, 18th Nov 2018 9:05 pm
    Davy on Sun, 18th Nov 2018 9:15 pm

  24. Davy on Mon, 19th Nov 2018 4:23 am 

    Socks:
    Truthteller on Mon, 19th Nov 2018 4:08 am
    Valley Girl on Mon, 19th Nov 2018 1:44 am

  25. Davy on Mon, 19th Nov 2018 4:44 am 

    IDENTITY THEFT

    Davy on Mon, 19th Nov 2018 4:22 am
    Davy on Mon, 19th Nov 2018 4:23 am

  26. Davy on Mon, 19th Nov 2018 4:53 am 

    Not me:

    Davy on Mon, 19th Nov 2018 4:44 am

  27. Davy on Mon, 19th Nov 2018 5:02 am 

    For those of you who care, I am generally off this site at 6-7pm. I am on usually around 4am. That should give you an idea of the pretending here at least at night. To the pretender who is stealing my identity, go ahead. I obviously have cleaned you clock and you have been defeated. I could give a shit about your identity theft any more. This has been going on for a long time now. I am used to it. It is the smell of victory over a loon. This is all you have left to do and you have no dignity left. You are obviously someone who does not care about others because those who come here to discuss don’t care for your activity. Yes, you are affecting the others here not only me. If you had a brain then you would debate the issues with me but you are obviously intellectually defeated. Have fun because it takes so much effort to play your games. It must get boring. I will outlast you. Doing dirty and nasty things gets old and you will weaken. LOL

  28. Davy on Mon, 19th Nov 2018 5:18 am 

    Not me

    Davy on Mon, 19th Nov 2018 5:02 am

    I’ve driven most of the other posters off of this site and the 6 or 7 that are still here have had enough of my bullshit also.

  29. Truthteller on Mon, 19th Nov 2018 7:31 am 

    “For those of you who care.” –Her Highness Davy–

    What a narcissistic nutter of the first order. Let me fill you in with a reality check… nobody but you cares. Sorry to deflate your bloated ego.

  30. Cloggie on Mon, 19th Nov 2018 9:19 am 

    As I already predicted, the EU has rejected any possibity of reopening negotiations. This is it:

    http://m.spiegel.de/video/brexit-deal-eu-europaminister-zeigen-einigkeit-in-bruessel-video-99022820.html

    There are socalled rebels who were dreaming of a “Canada+“-deal, more cherry-picking.

    Not going to happen.

    UK business leaders were cheering PM May today.

    https://www.dailymail.co.uk/news/article-6405057/PM-faces-rebel-Cabinet-ministers-lemming-MPs.html

    The rebels are rumoured to have 40 out of 48 required letters to initiate a vote of no confidence.

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