For the past four weeks including this week’s trading so far, Crude Oil has been trading within a range of $5, whether in Brent or WTI with no clear direction. Brent Crude was in the range between $45 and $50, while West Texas Crude managed to trade between $47 and $42, despite the fact that there were many catalysts affecting Oil demand and inventories, in addition to more remarks by OPEC and Non-OPEC members, which increased the uncertainty mode. Crude Oil Inventories Earlier this week, the American Petroleum Institute figures showed a notable decline in inventories including Crude Oil and Gasoline. API said that Crude Oil Inventories sli...
The Producer Price Index year-over-year inflation marginally declined from 2.4 % to 2.0 %. Analyst Opinion of Producer Prices The Producer Price Index is now on a noticeable moderation cycle – with most components declining year-over-year. My only conclusion is that generally there is an overabundance of goods and services – despite the Fed’s insistence the USA is near full employment. The PPI represents inflation pressure (or lack thereof) that migrates into consumer price. The BLS reported that the headline Producer Price Index (PPI) finished goods prices (now called final demand prices) year-over-year inflation ratemo...
Coffee has been rather cold the past few years, as Coffee ETF (JO) has declined from $80 back in 2011 to $15 of late. This decline has created a interesting Power of the Pattern setup and drove away most bullish investors in Coffee. Below I look at Coffee ETF JO and the pattern it has been making the past few years: No doubt the trend in Coffee is down at this time. As mentioned above, JO looks to have hit support of a bullish falling wedge at (1), where it created a rather large bullish wick (reversal pattern) a couple of weeks ago. A small counter trend rally has taken place the past couple of weeks and now JO is testing resistance of the...
The Dollar Index set the year’s high on January 3 a little above 103.20. Today it made marginal new lows for the year at 95.464. The previous low, set at the end of last month was 95.47. As this Great Graphic from Bloomberg illustrates the downtrend is very much intact (white line) and has accelerated in the last three months (steeper red line). The 2016 low was set in early May a little below 92.00. The Dollar Index took a little more than six months to unwind the gains it scored between the US election last November and January 3. There have been several points along the way that looked like a possible turning point. Another such w...
You could have knocked me over with a feather! (read “surprise comments” article here) Who knew? The Committee intends to gradually reduce the Federal Reserve’s securities holdings by decreasing its reinvestment of the principal payments it receives from the securities held in the System Open Market Account. Specifically, such payments will be reinvested only to the extent that they exceed gradually rising caps. Initially, these caps will be set at relatively low levels to limit the volume of securities that private investors will have to absorb. — Janet Yellen The unwinding of Quantitative Easing (QE) is to be very gradual, so a...
Bernanke presided over the Great Financial Crisis of 2008. Greenspan had the 1987 crash, along with the 2000 DotCom bust. Volcker had the bond debacle of the early 1980’s and the subsequent Latin American debt crisis. For the past 35 years, every Fed Chairperson has been tested with some sort of financial event. Until now… Janet Yellen was sworn into office as the Chair of the Federal Reserve on February 3rd, 2014 and since then, it has been fairly smooth sailing for financial markets. Sure there have been bumps along the way, but in the grand scheme of history, they have been fairly benign. Yellen’s term ends in late January 2018, and ...
The Bank of Canada raised rates and also pushed forecasts and expectations higher. USD/CAD tanked. Can the C$ continue higher? Here is their view, courtesy of eFXnews: Nomura Research continues to look for another BoC rate hike by December after the central bank raised the target for the overnight rate by 25bp to 0.75% at its July 2017 meeting. “From here, we are of the opinion that the BoC’s positive tweaks to its growth outlook and cautious optimism that inflation will pick-up points to further, albeit gradual, policy normalization over time,” Nomura argues. Fundamentally, this monetary policy impulse should continue to underpin the...
Delta Air Lines (DAL) 2Q 2017 earnings report was released before the opening bell this morning. The company posted adjusted earnings of $1.64 per share on $10.8 billion in revenue, compared to the Wall Street consensus estimates of $1.66 per share and $10.8 billion. Delta Air Lines 2Q 2017 earnings report Delta reported GAAP earnings of $1.68 per share for the second quarter, compared to $2.03 per share in last year’s second quarter. Management reported that the June quarter brought a return to growth in unit revenue, ending two and a half years without growth. Passenger revenue in the second quarter grew $261 million, of which $100 millio...
While the Fed’s traditionally drab Beige Book is routinely ignored by the market, especially on blockbuster days like when Janet Yellen turns dovish again and then speaks for nearly 4 hours in the Senate, this time there were several notable highlights in the just released July edition, not least of all the apparent downgrade of the low end of overall economic activity, which for the first time described the pace of growth as “slight to moderate” versus its staple “modest to moderate.” Of note, while the Fed described consumer spending as “rising across a majority of Districts, led by increases in non-au...
When the price breaks out of the bull market channel, it’s time for the crazy nutty phase of the bubble to begin. During this phase, the price can rally 100% or more in a year or less as the public begins to pile into the market. The PPT is going to “protect” the market right into another bubble. ...