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    US Energy: Changing Dynamics

    Cyber currencies and their underlying technology, the largely self-imposed drama in the US and UK, and the North Korea’s apparent acquisition of nuclear capability are among the significant macro developments this year. There is another development that like the others was a long time in the making, but seem to have reached a critical mass. It is the US prowess in the energy sector. It can have far-reaching political and economic significance.   The US oil imports continue to fall. Last week, the US imported about 1.77 mln barrels a day net, which is the least since 1990. There were some transitory factors, like the problems of ...
    On November 30, 2017 / By
  • Finance 0

    November 2017 Initial Unemployment Claims Rolling Average Worsens Marginally

    Hurricanes continue to impact claims taking procedures in the Virgin Islands. The market expectations for weekly initial unemployment claims (from Bloomberg/Econoday) were 235 K to 245 K (consensus 240,000), and the Department of Labor reported 238,000 new claims. The more important (because of the volatility in the weekly reported claims and seasonality errors in adjusting the data) 4 week moving average moved from 239,750 (reported last week as 240,000) to 242,250. The rolling averages generally have been equal to or under 300,000 since August 2014. Analyst Opinion of Initial Unemployment Claims This marks 140 consecutive weeks of initial ...
    On November 30, 2017 / By
  • Finance 0

    Another 1,000 Point Dow Threshold Bites The Dust

    While all the attention shifted towards bitcoin and the pace with which it traded up through different 1,000 point price levels, the DJIA just reminded investors that it too has been on quite a run. With the index on pace to close above 24,000 for the first time today, that now makes it six 1,000 point thresholds that the DJIA has crossed for the first time since last November’s Election. The table below lists the first day that the DJIA closed above each 1,000 point threshold beginning with 1,000 way back in 1972. Obviously, the higher the index goes, the less of a percentage move each successive threshold becomes, but the recent pace h...
    On November 30, 2017 / By
  • Finance 0

    Not So Fast, My Friend

    The recent sell-off in the U.S. high-yield (HY) market certainly garnered a good deal of attention. Indeed, with HY spreads in general narrowing to levels not seen since 2014, and before that the 2003–2007 period, investors began to entertain the idea that the widening in spreads that occurred from late October through mid-November could be a turning point in the credit markets. To quote ESPN’s College GameDay host Lee Corso: “Not so fast, my friend”. Let’s rewind the tape to take a look at exactly what happened in the HY market during the aforementioned time frame. From the recent low point of 326 basis points (bps) on Octo...
    On November 30, 2017 / By
  • Finance 0

    One-Day Wonder Or The New Trend?

    Well, that was interesting. In what can probably best be described as a fast money rotation game (something I like to call “Hedge Fund Follies”)- where traders sold the big-cap tech leaders and continued to buy the beneficiaries of the tax reform and the improving economy themes with both hands – the DJIA posted a triple-digit gain, while the Nasdaq 100 endured a triple-digit loss. Yep, that’s right fans; the FANG’s had a bad day at the office while the banks and transports soared. Such is life at times in the stock market game. Odd yes, but definitely not unprecedented. For those keeping score at home, the FANG’s did indeed have ...
    On November 30, 2017 / By
  • Finance 0

    EUR/USD Recovery Takes Shape As ECB See ‘Notable’ Euro-Area Growth

    EUR/USD snaps the series of lower highs & lows from earlier this week, with the pair at risk for a more meaningful recovery as the European Central Bank (ECB) adopts an improved outlook for the monetary union. Even though the ECB is on course to carry the quantitative easing (QE) program into 2018, Governing Council member Peter Praet asserted that the ‘the breadth of the expansion is notable,’ and went on to say that the recent data coming out of the euro-area is ‘reassuring for the growth outlook because recoveries tend to be firmer and more robust when they are broad-based.’ The recent comments suggest the ECB will continue t...
    On November 30, 2017 / By
  • Finance 0

    Citi Says Sell Gap On Old Navy Concerns Following Outperformance

    In a research note this morning, Citi analyst Paul Lejuez downgraded Gap (GPS) to Sell as he believes the risk/reward is skewed to the downside following recent share outperformance and as the company faces more challenging sales comparisons at Old Navy in 2018. SELL GAP: In a research to investors, Citi’s Lejuez downgraded Gap to Sell from Neutral, arguing that the risk/reward balance is skewed to the downside with the stock up nearly 40% over the past three months. In 2018, Gap will face tougher sales comparisons and the challenge of driving sales without deleveraging SG&A, a challenge that became even more apparent in the third q...
    On November 30, 2017 / By
  • Finance 0

    Lira Tumbles After Zarrab Confirms Erdogan Approved “Secret Iran Gold” Trade

    In somewhat of a worst-case scenario, Turkish-Iranian gold trader Reza Zarrab just confirmed that Turkish President Erdogan approved the “secret Iran gold” trade that enabled Iran to evade US sanctions. The immediate reaction is clear.   Citi’s FX desk explains why Turkish markets are watching the US trial of a banker so closely. The basics: The US government has accused Turkish banker Mehmet Hakan Atilla of helping Iran evade US sanctions. Turkey’s former economy minister, Zafer Caglayan, and two other banking executives, have been charged in absentia but Atilla is the only one on trial. Why it matters: It’s ab...
    On November 30, 2017 / By
  • Finance 0

    Yellen’s Last Testimony Before Congress And Gold

    Yesterday, Yellen testified before the U.S. Congress. What do her remarks mean for the gold market? On Wednesday, Janet Yellen, still the Federal Reserve Chair, testified before the Joint Economic Committee. Given that Powell will replace her as Fed chief, it was Yellen’s last testimony before Congress. Her prepared remarks were upbeat about the economic outlook. Yellen pointed out the labor market gains and noted that the U.S. economy strengthened further this year, as real GDP increased at a 3 percent pace in both the second and third quarters, despite the disruptions to economic activity caused by the recent hurricanes. Moreover, Yell...
    On November 30, 2017 / By
  • Finance 0

    Gold & Gold Stocks On Cusp Of Downside Break

    We provide our immediate outlook for Gold and gold stocks which is bearish but we also touch on how gold stocks fit into the history of recoveries from mega bear markets. This history implies gold stocks will make a significant low in 2018 and perform fantastically well into 2019....
    On November 30, 2017 / By