For the first time in 3 months, WTI has dropped below $50 a barrel after crude inventories were shown rising by 8.2 million barrels last week. Inventory levels are now at their highest levels since the US government began recording data in 1982. Why this matters: while oil prices have come back to life, the oil supply glut is not over by a long shot. For weeks now, US stockpiles have been rising. And this is largely because capital expenditure for US-based shale oil has rebounded after the shakeout caused by oil’s plunge to the $30 range. Rig counts are now back to pre-crisis levels, with the latest Baker Hughes rig count showing 756 rigs, ...
Staples, Inc. (SPLS) early Thursday posted mixed fourth quarter earnings results and offered an in-line outlook for 2017, as it makes progress in its delivery business but continues to struggle on the brick-and-mortar side....
Today’s main event is the ECB meeting and press conference the European Central Bank is not expected to change its rate policy even though inflation has hit the 2% target for the first time since 2013 as uncertainties over the Euro area such as elections in France, Holland and Germany are likely to keep the ECB on hold. Overnight we have seen the Dollar strengthen against all currencies after the ADP employment data came out very strong at 298.000 indicating a growing employment sector. As mentioned before, the Fed is now waiting for the NFP data on Friday to confirm its speculated rate rise in March, and judging from the ADP data, NFP ...
AT40 = 43.3% of stocks are trading above their respective 40-day moving averages (DMAs)AT200 = 60.5% of stocks are trading above their respective 200DMAsVIX = 11.9 (volatility index)Short-term Trading Call: neutral Commentary Times like these really put AT40 (T2108), the percentage of stocks trading above their respective 40-day moving averages (DMAs), to test. The stock market’s underpinnings continued their slides on Wednesday with AT40 dropping to a level last seen the day after the U.S. Presidential election. AT200 (T2107), the percentage of stocks are trading above their respective 200DMAs, dropped in unison and confirmed the end of...
The European Central Bank left its interest rates unchanged as expected. The main lending rate stands at 0% and the deposit rate at -0.40%. The QE program continues as planned: 80€ billion / per month through this month and 60€ billion per month from April and until the end of the year. The focus now shifts to ECB President Mario Draghi’s press conference. His tone regarding inflation as well as the new staff forecasts published by the Frankfurt-based institution. An upgrade is predicted for 2017 but no changes are on the cards for 2018 and 2019. Full preview: ECB – acknowledging inflation or ignoring it? That is the question for...
The bull market has a lot more room to run. With the Trump Administration and GOP Congress deconstructing investment-killing business regulations and aiming to cut taxes, the economy is poised to grow faster, and new technologies will support higher valuations over the next several years Supporting prospects for bigger profits, the energy and manufacturing sectors are becoming more efficient. With oil prices recovering to the low $50 range, oil and gas drilling has increased significantly since May. And manufacturing is posting more gains—to supply that industry and others—despite a stronger dollar. Consumer spending remains robust and...
Video length: 00:08:01 While the ECB will be released new staff economic projections (SEPs) due on Thursday, the scope for the ECB to act at this meeting, one way or the other, seems very limited. Primarily, this is due to upcoming political risk, with Dutch elections next Wednesday, and French presidential elections in April and May. To be fair, economic data has been improving steadily in recent weeks, beyond consensus expectations by a wide margin. The Euro-Zone Citi Economic Surprise Index finished last week at +70.0, up from +55.9 a month earlier. On the other hand, despite the German and Euro-Zone CPIs running through +2%, the 5-year, 5...
There are no guarantees when predicting Federal Reserve monetary policy decisions. But yesterday’s surprisingly strong increase in US private payrolls in February by ADP’s reckoning gives the hawks a potent new data point to make the case for squeezing monetary policy at next week’s FOMC meeting. A quick review of Wednesday’s news: the crowd was looking for a gain of 183,000, based on Econoday.com’s consensus forecast. The actual increase was sharply higher at a sizzling 298,000. One month is hardly definitive proof of anything in economics, but as I noted yesterday the year-over-year change for payrolls has been ticking higher ...
The USD/JPY struck a 3-week peak and the greenback is poised to record a 4th consecutive day of gains after ADP data released yesterday beat all expectations. Often viewed as a “gauge” for Friday’s critical non-farms labor report, yesterday’s release showed that 298,000 new private sector jobs were added to the US economy, against expectations of a decline to 190,000. The government’s NFP report is currently also forecast at 190,000 new jobs which, if realized, would be a fall from February’s 227,000 reported. Any upbeat surprise is likely to broadly support the US Dollar as investors are hopeful that the Federal Reserve acknowled...
While traders will be focused on the ECB, and Mario Draghi, early Thursday, it is unlikely that the European central bank will announce anything overly dramatic (see preview in a subsequent post), and instead the attention will be on the ECB’s inflation forecast for hints of when the ECB may accelerate tapering after its December 2016 QE cut, as Draghi scrambles to catch up with commodity inflation, if not so much core CPI, which has remained subdued. CHART: Here’s how the past 6 #ECB forecasts compare with actual inflation. Expect 2017 to be revised upward today. https://t.co/Mmtkq1KS98 pic.twitter.com/XNVXCncvmH — Maxime Sbaih...