The stock market finally fell 1% on Tuesday as all the major averages plummeted. As you can see in the chart below, the streak without a 1% decline in a day made it to the top 10 longest in history. There was only one streak in the 1990s which was longer than this streak which is impressive because I consider the 1990s rally to be the greatest in market history. I have been discussing the idea that earnings and fiscal policy will have to drive the market higher now that the Fed isn’t supporting it with zero percent interest rates. Because these are what will drive the market, it is reasonable for me to conclude they were a factor in the sel...
The last time oil inventory grew at anywhere close to this pace was during each of the last two selloffs, the first in late 2014/early 2015 and the second following about a year after. Those events were relatively easy to explain in terms of both price and fundamentals, though the mainstream managed to screw it up anyway (“supply glut”). By and large, the massive contango of the futures curve that showed up as a result of “dollar” conditions made it enormously profitable to pull crude out of current flow and deposit it wherever storage might be available, even at some considerable cost (so steep was the contango). It was the symbolic ...
The last time oil inventory grew at anywhere close to this pace was during each of the last two selloffs, the first in late 2014/early 2015 and the second following about a year after. Those events were relatively easy to explain in terms of both price and fundamentals, though the mainstream managed to screw it up anyway (“supply glut”). By and large, the massive contango of the futures curve that showed up as a result of “dollar” conditions made it enormously profitable to pull crude out of current flow and deposit it wherever storage might be available, even at some considerable cost (so steep was the contango). It was the symbolic ...
First and foremost, my sincere condolences to the families of the victims in today’s attack in London. Although I use the sky to represent the “wall”, the writing has a similar intention. “The writing on the wall”, a Biblical story, appears after a King drinks wine from looted vessels seized at a destroyed Temple. An ominous message appears that the days of his Kingdom are numbered. Admittedly histrionic, my purpose is to illustrate that the skywritten “X” marks the current market’s inflection point. We have witnessed countless days this year where the indices outperform the overall breadth of the market. For instance, while...
First and foremost, my sincere condolences to the families of the victims in today’s attack in London. Although I use the sky to represent the “wall”, the writing has a similar intention. “The writing on the wall”, a Biblical story, appears after a King drinks wine from looted vessels seized at a destroyed Temple. An ominous message appears that the days of his Kingdom are numbered. Admittedly histrionic, my purpose is to illustrate that the skywritten “X” marks the current market’s inflection point. We have witnessed countless days this year where the indices outperform the overall breadth of the market. For instance, while...
The Reserve Bank of New Zealand left interest rates unchanged at 1.75% this afternoon. Although the central bank felt that the currency needs to fall further to balance growth and monetary policy needs to remain accommodative for a considerable period of time, they also see inflation rising in the months ahead. They view the current growth outlook as positive which is a sign that the central bank is growing less dovish. We think this should provide further support for NZD in the near term. The U.S. dollar remains under pressure but traders need to be careful because Yellen is speaking on Thursday. Technically, NZD/USD is trading above the 20-...
The Reserve Bank of New Zealand left interest rates unchanged at 1.75% this afternoon. Although the central bank felt that the currency needs to fall further to balance growth and monetary policy needs to remain accommodative for a considerable period of time, they also see inflation rising in the months ahead. They view the current growth outlook as positive which is a sign that the central bank is growing less dovish. We think this should provide further support for NZD in the near term. The U.S. dollar remains under pressure but traders need to be careful because Yellen is speaking on Thursday. Technically, NZD/USD is trading above the 20-...
Thursday’s vote on Speaker Ryan’s wrong-headed plan to repeal and replace Obamacare involves far more than keeping faith with a crucial campaign pledge or the Donald’s notion that it’s just the preliminaries to “cutting the hell out of taxes”. In fact, the passage of Obamacare Lite would mean the triumph of a runaway Welfare State in aging and job-deficient America. It would eventually result in fiscal catastrophe and the certainty of tax increases – not cuts – as far as the eye can see. As we pointed out the other day, the nation’s bloated and unsustainable health care system consum...
Thursday’s vote on Speaker Ryan’s wrong-headed plan to repeal and replace Obamacare involves far more than keeping faith with a crucial campaign pledge or the Donald’s notion that it’s just the preliminaries to “cutting the hell out of taxes”. In fact, the passage of Obamacare Lite would mean the triumph of a runaway Welfare State in aging and job-deficient America. It would eventually result in fiscal catastrophe and the certainty of tax increases – not cuts – as far as the eye can see. As we pointed out the other day, the nation’s bloated and unsustainable health care system consum...
Shares of TransDigm (TDG) continued their slide Wednesday as research firm Cowen cut the aerospace components maker to neutral, arguing that headline risk should limit near-term upside given yesterday’s news of a request for an investigation into the company’s business practices. BACKGROUND: On January 20, Citron issued a short report on TransDigm, writing that “everyone in the aerospace industry knows that one company stands out when it comes to egregious price increases foisted on the government: TransDigm.” Following Citron’s allegations and the subsequent fall in TransDigm shares, analysts from Credit Suisse,...