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“No All Clear” – Bitcoin & Bullion Jump, Stocks Dump On Week As Yield-Curve Un-Inverts

"No All Clear" – Bitcoin & Bullion Jump, Stocks Dump On Week As Yield-Curve Un-Inverts

An inverted curve lights the fuse but the un-inversion…

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"No All Clear" - Bitcoin & Bullion Jump, Stocks Dump On Week As Yield-Curve Un-Inverts

An inverted curve lights the fuse but the un-inversion is 'the bad part' signaling imminent recession...

...and today we saw the 2s30s curve go positive once again and closed at its 'steepest' since Aug 2022...

Source: Bloomberg

Additionally, the 'real' yield curve steepened dramatically, also pushing back up towards un-inverted...

Source: Bloomberg

The steepening is extremely evident in the week's moves across the curve with 2Y up just 3bps and 30Y up 33bps...

Source: Bloomberg

There was also a notable swing in rate-cut expectations for next year. While we zoomed out for context in the chart below, this week saw rate-cut expectations drop from 84bps to 67bps and then reverse back to 78bps (of cuts) after Powell...

Source: Bloomberg

As we discussed previously, this is a warning sign because inverted yield curves precede recessions, but it’s the re-steepening that signals the downturn is going to hit sooner rather than later.

Source: Bloomberg

Historically it is the 3m30y yield curve that has started steepening first before a recession, beginning to rise about five months before its onset. It began in mid-January, which would put a downturn starting as early as June. The spread between 3-month and 30-year yields is about minus 84 basis points, versus the January low of minus 115 basis points.

And 3m30Y has been steepening dramatically this week...

Source: Bloomberg

And before we leave bond-land, we note that financial conditions are now at their tightest since Nov 2022.... and it looks like its starting to drag on the real economy...

Source: Bloomberg

Equity markets did not like this 'high for long' adjustment, especially longer-duration (big tech) as Nasdaq led the week's weakness, down 3%. Equities went out at their lows...

Under the hood today (a monthly OpEx), 0-DTE traders were fighting the down-trend all day - buying calls early and dumping puts later...

Source: SpotGamma

This week saw the 3rd major shorting wave in October with 'Most Shorted' basket dumping...

Source: Bloomberg

Energy and Staples were the week's only green sectors with Discretionary and Real Estate hammered...

Source: Bloomberg

The S&P broke below its uptrendline from September and reached down to its 200DMA

Source: Bloomberg

Regional banks were clubbed like a bay seal this week, now below SVB spike lows...

Source: Bloomberg

The big banks were very mixed with WFC outperforming since earnings began (and the only one green) and MS the biggest loser...

Source: Bloomberg

Of particular note, the GLP-1s (Anti-Obesity drugs) significantly underperformed this week...

Source: Bloomberg

And AI-related names underperformed the AI-at-risk names (amid an admittedly weak market for tech)...

Source: Bloomberg

VIX is on the rise (finally) back above 20 but as Nomura's Charlie McElligott warns, make no mistake: there is no “all clear” [to sell 'high vol'] when “Vol of Vol” VVIX remains parked at 115...

Source: Bloomberg

...which tells you that via “demand for Tails” and a broader distribution of market outcomes that we can remain “stressed,” particularly as client hedging is moving away from short-dated “1 day event risk” and now, into the “unknowable” - where you add geopolitics now on top of the “real risk” being the Credit cycle turn.

While VIX was rising, Gold surged this week with spot prices very close to breaking $2000...

Source: Bloomberg

Oil rallied on the week with WTI getting close to $90 intraday before sliding today...

Bitcoin also caught a safe-haven (and ETF-driven) bid...

"Bitcoin is more user-friendly, stable, and global than some local currencies, especially in geopolitical conflicts and sanctions. In other words, the more unrest and uncertainty in the world, the more value bitcoin demonstrates, it's a sad truth," BTCM Chief Economist Youwei Yang told The Block.

"Bitcoin's resilience, especially when juxtaposed with the recent downturns in stock market indices, lends credence to the narrative that the digital asset serves as a potential hedge in tumultuous times, akin to gold," Sei Labs Co-Founder Jeff Feng added.

Talking of panic and capital ouflows (which also surged in China), the black market price for the Argentine Peso crashed 10% to 1100/USD (the official-ish price has been 'capped' at 350/USD for 3 months)...

Finally, this is worth paying attention in the context of surging US interest rates...

Source: Bloomberg

...since the Biden administration came into office, the risk of a US sovereign credit event has risen by 5x and are on the rise again now back to levels last seen during the debt-ceiling debacle. That trend is not Americans' friend (and is perhaps why gold has been so bid).

Tyler Durden Fri, 10/20/2023 - 16:00

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Apparel Retailer Express Moving Toward Bankruptcy

Apparel Retailer Express Moving Toward Bankruptcy

During the company’s last earnings call in November, recently appointed CEO Stewart Glendinning…

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Apparel Retailer Express Moving Toward Bankruptcy

During the company’s last earnings call in November, recently appointed CEO Stewart Glendinning acknowledged the company made some missteps: Among other factors, there was a misalignment between its assortment and customer demand, Retail Dive's Nate Delesline reports.

An Express storefront at King of Prussia mall in Pennsylvania. The retailer said this week that it plans to initiate an international brand expansion starting next year

Express took a hit during the pandemic as its core offering — business casual — fell out of favor as work-from-home surged.

“Unfortunately, my previous assessment of Express’ fragile financial situation leading to a possible bankruptcy due to declining revenue, gross margin profits and ballooning debt of $280 million is a foregone conclusion,” Shawn Grain Carter, a retail industry consultant and professor at the Fashion Institute of Technology at the State University, said in an email to Retail Dive. “With high-interest rates, the retail company must decide between the ‘lesser of two evils.’ Moreover, until they fix the waning consumer demand for their merchandise and elevate the brand and product mix, financial wizardry will not resolve their retail woes.”

Over the past several years, the company has undergone a number of changes as it works to improve its performance. Last January, WHP Global closed on a strategic partnership with Express. The two entities formed an intellectual property joint venture under which WHP contributed $235 million for a 60% stake, while Express retained the remaining 40%. The two entities in November announced plans to expand Express internationally, including in Indonesia and Paraguay, and grow its presence in Central America and Mexico. 

And after the New York Stock Exchange warned of a potential delisting in late March, Express executed a 1-for-20 reverse stock split, which decreased outstanding shares to 3.7 million from 74.9 million. That stock split enabled Express to regain listing compliance with the New York Stock Exchange. Around the same time, Express said it planned to cut 150 jobs by the end of the third quarter.

The company also expanded its portfolio last year through a deal with WHP to acquire Bonobos from Walmart for $75 million. That acquisition helped guide the retailer to a 5% year-over-year uptick in Q3 net sales to $454.1 million from $434.1 million a year earlier. However, comparable sales for Express stores and e-commerce fell 4% and net loss grew to $36.8 million from $34.4 million in the year-ago period. Inventory was also up 14% for the quarter, rising to nearly $481 million from $422.7 million a year earlier. 

“Express has the right building blocks in place with a strong portfolio of brands, a high-potential partnership with WHP and a premier omnichannel platform,” Glendinning said in the earnings announcement. “Our efforts to unlock our full potential and improve our performance are already underway.”

The apparel retailer in late November lowered its full-year 2023 guidance, now expecting net sales to be between $1.84 billion and $1.87 billion, with Bonobos driving $150 million in net sales. 

Finally, on Friday, Bloomberg reported that at least one lender to Express has approached the retailer to put aside a pool of money for expenses tied to a potential future bankruptcy filing.

A demand to set aside so-called cash reserves, if enforced, could push Express into Chapter 11 as it would eat into limited liquidity available for necessary payments to vendors, landlords and other parties.

Creditors have been growing increasingly antsy and considering whether to push the company to file for bankruptcy, Bloomberg previously reported.

Express, which is burning through a short supply of cash as it attempts to fix troubled operations, is looking to avoid any move to fund reserves for as long as possible, other people familiar with the matter said. The retailer lost over $150 million in three quarters through late October as it faced an escalating competitive threat from fast-fashion rivals.

Tyler Durden Fri, 02/23/2024 - 18:00

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Apparel Retailer Express Moving Toward Bankruptcy

Apparel Retailer Express Moving Toward Bankruptcy

During the company’s last earnings call in November, recently appointed CEO Stewart Glendinning…

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on

Apparel Retailer Express Moving Toward Bankruptcy

During the company’s last earnings call in November, recently appointed CEO Stewart Glendinning acknowledged the company made some missteps: Among other factors, there was a misalignment between its assortment and customer demand, Retail Dive's Nate Delesline reports.

An Express storefront at King of Prussia mall in Pennsylvania. The retailer said this week that it plans to initiate an international brand expansion starting next year

Express took a hit during the pandemic as its core offering — business casual — fell out of favor as work-from-home surged.

“Unfortunately, my previous assessment of Express’ fragile financial situation leading to a possible bankruptcy due to declining revenue, gross margin profits and ballooning debt of $280 million is a foregone conclusion,” Shawn Grain Carter, a retail industry consultant and professor at the Fashion Institute of Technology at the State University, said in an email to Retail Dive. “With high-interest rates, the retail company must decide between the ‘lesser of two evils.’ Moreover, until they fix the waning consumer demand for their merchandise and elevate the brand and product mix, financial wizardry will not resolve their retail woes.”

Over the past several years, the company has undergone a number of changes as it works to improve its performance. Last January, WHP Global closed on a strategic partnership with Express. The two entities formed an intellectual property joint venture under which WHP contributed $235 million for a 60% stake, while Express retained the remaining 40%. The two entities in November announced plans to expand Express internationally, including in Indonesia and Paraguay, and grow its presence in Central America and Mexico. 

And after the New York Stock Exchange warned of a potential delisting in late March, Express executed a 1-for-20 reverse stock split, which decreased outstanding shares to 3.7 million from 74.9 million. That stock split enabled Express to regain listing compliance with the New York Stock Exchange. Around the same time, Express said it planned to cut 150 jobs by the end of the third quarter.

The company also expanded its portfolio last year through a deal with WHP to acquire Bonobos from Walmart for $75 million. That acquisition helped guide the retailer to a 5% year-over-year uptick in Q3 net sales to $454.1 million from $434.1 million a year earlier. However, comparable sales for Express stores and e-commerce fell 4% and net loss grew to $36.8 million from $34.4 million in the year-ago period. Inventory was also up 14% for the quarter, rising to nearly $481 million from $422.7 million a year earlier. 

“Express has the right building blocks in place with a strong portfolio of brands, a high-potential partnership with WHP and a premier omnichannel platform,” Glendinning said in the earnings announcement. “Our efforts to unlock our full potential and improve our performance are already underway.”

The apparel retailer in late November lowered its full-year 2023 guidance, now expecting net sales to be between $1.84 billion and $1.87 billion, with Bonobos driving $150 million in net sales. 

Finally, on Friday, Bloomberg reported that at least one lender to Express has approached the retailer to put aside a pool of money for expenses tied to a potential future bankruptcy filing.

A demand to set aside so-called cash reserves, if enforced, could push Express into Chapter 11 as it would eat into limited liquidity available for necessary payments to vendors, landlords and other parties.

Creditors have been growing increasingly antsy and considering whether to push the company to file for bankruptcy, Bloomberg previously reported.

Express, which is burning through a short supply of cash as it attempts to fix troubled operations, is looking to avoid any move to fund reserves for as long as possible, other people familiar with the matter said. The retailer lost over $150 million in three quarters through late October as it faced an escalating competitive threat from fast-fashion rivals.

Tyler Durden Fri, 02/23/2024 - 18:00

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Apparel Retailer Express Moving Toward Bankruptcy

Apparel Retailer Express Moving Toward Bankruptcy

During the company’s last earnings call in November, recently appointed CEO Stewart Glendinning…

Published

on

Apparel Retailer Express Moving Toward Bankruptcy

During the company’s last earnings call in November, recently appointed CEO Stewart Glendinning acknowledged the company made some missteps: Among other factors, there was a misalignment between its assortment and customer demand, Retail Dive's Nate Delesline reports.

An Express storefront at King of Prussia mall in Pennsylvania. The retailer said this week that it plans to initiate an international brand expansion starting next year

Express took a hit during the pandemic as its core offering — business casual — fell out of favor as work-from-home surged.

“Unfortunately, my previous assessment of Express’ fragile financial situation leading to a possible bankruptcy due to declining revenue, gross margin profits and ballooning debt of $280 million is a foregone conclusion,” Shawn Grain Carter, a retail industry consultant and professor at the Fashion Institute of Technology at the State University, said in an email to Retail Dive. “With high-interest rates, the retail company must decide between the ‘lesser of two evils.’ Moreover, until they fix the waning consumer demand for their merchandise and elevate the brand and product mix, financial wizardry will not resolve their retail woes.”

Over the past several years, the company has undergone a number of changes as it works to improve its performance. Last January, WHP Global closed on a strategic partnership with Express. The two entities formed an intellectual property joint venture under which WHP contributed $235 million for a 60% stake, while Express retained the remaining 40%. The two entities in November announced plans to expand Express internationally, including in Indonesia and Paraguay, and grow its presence in Central America and Mexico. 

And after the New York Stock Exchange warned of a potential delisting in late March, Express executed a 1-for-20 reverse stock split, which decreased outstanding shares to 3.7 million from 74.9 million. That stock split enabled Express to regain listing compliance with the New York Stock Exchange. Around the same time, Express said it planned to cut 150 jobs by the end of the third quarter.

The company also expanded its portfolio last year through a deal with WHP to acquire Bonobos from Walmart for $75 million. That acquisition helped guide the retailer to a 5% year-over-year uptick in Q3 net sales to $454.1 million from $434.1 million a year earlier. However, comparable sales for Express stores and e-commerce fell 4% and net loss grew to $36.8 million from $34.4 million in the year-ago period. Inventory was also up 14% for the quarter, rising to nearly $481 million from $422.7 million a year earlier. 

“Express has the right building blocks in place with a strong portfolio of brands, a high-potential partnership with WHP and a premier omnichannel platform,” Glendinning said in the earnings announcement. “Our efforts to unlock our full potential and improve our performance are already underway.”

The apparel retailer in late November lowered its full-year 2023 guidance, now expecting net sales to be between $1.84 billion and $1.87 billion, with Bonobos driving $150 million in net sales. 

Finally, on Friday, Bloomberg reported that at least one lender to Express has approached the retailer to put aside a pool of money for expenses tied to a potential future bankruptcy filing.

A demand to set aside so-called cash reserves, if enforced, could push Express into Chapter 11 as it would eat into limited liquidity available for necessary payments to vendors, landlords and other parties.

Creditors have been growing increasingly antsy and considering whether to push the company to file for bankruptcy, Bloomberg previously reported.

Express, which is burning through a short supply of cash as it attempts to fix troubled operations, is looking to avoid any move to fund reserves for as long as possible, other people familiar with the matter said. The retailer lost over $150 million in three quarters through late October as it faced an escalating competitive threat from fast-fashion rivals.

Tyler Durden Fri, 02/23/2024 - 18:00

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