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Finance 0
Institutional Investors Are Selling Global Equities Into Strength
For the second month in a row the State Street Investor Confidence Index came in below 100 (the index uses State Street’s global custodian business to gauge investor sentiment based on exposures/trading, and readings below 100 indicate institutional investors are selling/reducing exposure to risk assets). The November reading was 97.1 – basically unchanged from 96.9 in October. As the title suggests, this represents institutional investors selling into strength. The selling has been driven by European institutional investors, with the index for Europe dropping to the lowest level since 2011. Asian funds were also net-sellers... -
Finance 0
This U.S. Oil Sector Is Booming
In the decade from January 2000 through December 2010, U.S. exports of oil products like gasoline, diesel fuel, jet fuel, etc., grew by nearly 160%. The exports averaged 1.1 million barrels per day for that period. According to the Energy Information Administration’s data, we export nearly five times that much now. The shale boom in places like the Permian Basin of Texas spurred the growth in refined exports. The light sweet crude oil can be run through a simple refining process, put on a ship and sent abroad. You can see the growth in the export chart below: Our largest trading partners are our neighbors to the north and south. The table b... -
Finance 0
Market Talk – Tuesday, Nov. 28
Asia responded to an uncertain US session with its own uncertainty! The Nikkei was almost unchanged despite the move back into the Yen. The currency traded back toward the 111 level but stopped shy by only a few Sen. The Hang Seng closed almost unchanged but we saw a small positive move back for the Shanghai (+0.3%). The KOPSI also managed a small bounce after yesterdays sever loss closing +0.25% firmer. With little to really write home about, lets move to later in the day. As far as headlines go we should really look at the UK’s FTSE as a gain of 1% looks impressive. However, what we should state is that the currency (GBP) was lower (-0.5%... -
Finance 0
Short Setups I Am Watching
The key word is “watching”, because I haven’t pulled the trigger on any of them. And with the market rallying hard today, what incentive is there to trade any of them at this moment? Instead, as has been the case for nearly all of 2017, I will continue to watch these setups, and only short them if the market gives me a clear reason to do so. Until then, I’ll just be maintaining this list and nothing more. Here’s the bearish watch list to follow:... -
Finance 0
Lira Plunges As Mystery Gold Trader Exposes “Secret” Turkish Deal To Evade Washington’s “Economic Jihad”
We detailed below that TRY was selling off on US accusations that the Turkish economic minister of taking bribes. 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 about the implications this has for US/Turkey diplomatic relations. Bloomberg has a good explainer here: ‘The focus will be on whether [Za... -
Finance 0
Regional Fed Manufacturing Overview: November Update
Five out of the twelve Federal Reserve Regional Districts currently publish monthly data on regional manufacturing: Dallas, Kansas City, New York, Richmond, and Philadelphia. Regional manufacturing surveys are a measure of local economic health and are used as a representative for the larger national manufacturing health. They have been used as a signal for business uncertainty and economic activity as a whole. Manufacturing makes up 12% of the country’s GDP. The other 6 Federal Reserve Districts do not publish manufacturing data. For these, the Federal Reserve’s Beige Book offers a short summary of each districts’ manufacturing... -
Finance 0
Fed Unwind And Gold
The Federal Reserve’s unwinding program started in October. What does it mean for the gold market? Last month, the U.S. central bank began reducing its massive balance sheet. Many analysts and investors worried that the so-called reverse quantitative easing would disrupt financial markets. The logic behind these concerns was simple: as quantitative easing supported asset prices, its reversal would upset the markets. However, we have not seen any signs of significant turmoil. Surely, the VIX and credit spreads increased somewhat in the first half of November, but financial stress in the markets hit another record low, as one can see in t... -
Finance 0
The Most Active Equity Options And Strikes For Midday – Tuesday, Nov. 28
Top tickers for midday – F, BAC, AAPL, ETFC, NWL, LC. ... -
Finance 0
Are We In A Bull Or A Bear Market In Precious Metals – Two Misleading Charts
Precious metals flows data, delivered by popular gold/silver ETFs, can be very misleading. For example, look at these two charts: iShares Gold Trust (IAU) Source: Simple Digressions and the IAU data The chart shows gold flows reported by IAU. The red line depicts cumulative flows calculated for the period January 1 – November 27, 2017. It is easy to spot that as many as 1.5 million ounces of gold have been added to IAU vaults this year so far. Now look at this chart: iShares Silver Trust (SLV) Source: Simple Digressions and the SLV data SLV is the world’s largest private holder of silver bullion. However, this year this giant... -
Finance 0
E The Digital World Challenges Central Bankers
Central bankers have been greatly puzzled by low inflation, despite their valiant efforts to stimulate growth by expansionist monetary policy. Initially, bankers referred to the low inflation numbers as “transitory” and “noisy”, implying that patience is needed to reach inflation targets. Slowly, bankers are admitting that weak inflation may not be transitory and that other, unidentified, factors are at play. What might these factors be? Recent analytical studies by research staff at the Bank of Canada offer insights on the effect of digitalization on consumer prices.[1] Moreover, the conclusions reached bear directly on the use of mo...
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