Oh, yes, I remember now – – “trendlines matter” There really aren’t enough ways to say “thank you” for this February 22nd call on crude oil (when it was $55). It has plunged about 14% since then....
Although most of the attention being paid by markets centers on the upcoming FOMC decision due for release on Wednesday, the European dynamic has been dominated by inflationary data from across the continent.The latest data from Sweden in particular mirrors similar dynamics unfolding across the globe as resurgent energy prices help spur higher consumer prices.Although the Swedish Riksbank remains cautious towards the outlook, these figures suggest that the Central Bank will gradually be able to ease away from highly accommodative monetary policies. However, despite the progress on the inflationary front, the major risk factor of fluctuating e...
The pound dropped quite sharply in a belated reaction to the end of the legal process. Brexit is in the hands of Theresa May now. What’s next? The next risk event is the BOE. Here is their view, courtesy of eFXnews: Credit Agricole CIB Research expects the BoE to stay on the dovish side this week linking its dovish policy stance to Brexit related long-term uncertainty. With regard to positioning, CACIB data continues to suggest that ‘investors run a relatively balanced position, which indicates that current GBP levels should not be treated as oversold.’ As such, CACIB argues that further GBP downside risks cannot be excluded in the...
The year is off to a sizzling start for job creation. Employers added almost half a million jobs in the first two months of 2017, the best back-to-back performance since last summer. Not only were workers hired at a robust pace, unemployment came down and wages scaled higher. The number of people losing jobs is also at its lowest since 1973. Staffing companies stand to gain as the labor market strengthens, while President Donald Trump’s campaign promises, including a job-boosting tax or infrastructure program, is likely to reverse a decade-long decline in factory jobs. Payroll Shows Solid Gains U.S. employers added 235,000 new jobs in Febru...
Back on February 10, I wrote a post called Lake Erie, and I did a post for my beloved Slope Plus members called Return to Lake Erie, in which I suggested that energy stocks were going to head lower, and noted I was going to buy the triple-bearish ETF symbol ERY (my precise words on February 10th were Yesterday I start accruing a sizeable position in my IRA account of ERY, the triple-bearish fund based on energy stocks. So far, so good.) I would say this has been going pretty well, as the arrow “buy” point reveals. We’re up about 25% since then. I confess to getting a little nervous with crude oil approaching a fairly important tre...
Oil prices are lower for the seventh consecutive session. Light sweet crude prices had fallen 10.3% over the past two weeks, and with today’s losses are off another 1.6% already this week. There are two main considerations. The imbalance between supply and demand has not adjusted as much as expected, and the market positioning is extremely long, with many bank analysts still nursing bullish forecasts. The April light sweet contract is trading at its lowest level since the end of last November. At $47.20 would have retraced 61.8% of the rally since shortly after the US election.Below there the risk extends to $45-$46.Over, the sligh...
Earlier this morning, we noted that crude had put the brakes on a six day slide. “The market is beginning to turn its attention to Wednesday with the Fed and the EIA reports,” Ole Hansen, head of commodity strategy at Saxo Bank said, adding that “[everyone] is still nervous but we are retracing a bit after that selloff.” Or, we were retracing a bit after the selloff. Now, following reports that Saudi Arabia told OPEC the kingdom raised output to over 10m b/d in February, we’re retracing the retrace. Behold: more deflation…. This seems like a good time to remind you of what we said over the weekend about the Saudis’ like...
As I noted two weeks ago as we were striking the 2400 region on the S&P 500 (SPX): “As we now find ourselves striking our target of 2400-2440SPX, now is the time to emotionally prepare yourself for a ‘pullback.'” Since that time, the market has been consolidating lower. In just the last 24 hours on Seeking Alpha alone, where I publish frequently, I have counted no less than nine bearish articles, with headlines such as, “Convincing Traits Of A Market Bubble,” “When This All Blows Up…” and “The Correction In The S&P 500 Is Already Here.” Yes, it seems that the market is q...
With tomorrow’s rate hike baked in the cake, today’s hotter than expected PPI print for February provides Yellen more cover (as economic growth forecasts slump). PPI Final Demand surged 2.2% YoY (more than expected) driven by a 4.0% YoY jump in final demand goods. This is the highest inflationary print since March 2012. Final Demand Energy prices surged 19.8% YoY In February, another major factor in the increase in prices for final demand services was the index for traveler accommodation services, which rose 4.3 percent. The indexes for chemicals and allied products wholesaling; legal services; apparel wholesaling; health, beau...
While we wait on this week’s big events, which include the FOMC announcement and Janet Yellen press conference Wednesday afternoon, the election results in the Netherlands, meetings of the Bank of Japan, the Bank of England, and the Swiss National Bank on Thursday, and the Brits triggering Article 50 to initiate the BREXIT, I thought it would be a good idea to check in with our cycle work. With just about everybody and their grandmother expecting a correction in the near-term, I wanted to know if the seasonal tendencies favored some sort of setback. And while I have learned the hard way over the past thirty years to be leery of the crowd ...