Once again, a tweet kept the biotech industry on edge with President Donald Trump declaring that he is “working on a new system where there will be competition in the Drug Industry” and “pricing for the American people will come way down”. The tweet triggered a 1.6% decline in the Nasdaq Biotechnology Index in a single day. However, no details were provided as to how this will be achieved. Recap of the Week’s Most Important Stories Concert Hits 52-Week High on Vertex Deal: Concert (CNCE – Free Report) , a clinical-stage company, was up 62.1% on a deal worth up to $250 million with Vertex (VRTX – Free Report) for its...
WTI Crude Oil The WTI Crude Oil market rallied during the day on Tuesday initially, but gave back quite a bit of the gains as we continue to see volatility in this market. It looks as if the area above continues to be resistive, but quite frankly I think that the Crude Oil Inventories announcement will continue to keep the market on its toes, as we weigh the effects of oil output production cuts by OPEC, and of course the oversupply. The announcement today will be crucial, expected to be an addition of 1.66 million barrels. We continue to see a build of inventory, so I feel it’s only a matter of time before the sellers get aggressive. Short...
The mystery of last week’s Caterpillar office raid by various US government agencies may have been resolved, after the NYT reported overnight that a report commissioned by the government, written by an accounting professor at the Tuck School of Business at Dartmouth, has accused the heavy-equipment maker of carrying out tax and accounting fraud. “Caterpillar did not comply with either U.S. tax law or U.S. financial reporting rules,” wrote Leslie A. Robinson, an accounting professor at the Tuck School of Business at Dartmouth College and the author of the report. “I believe that the company’s noncompliance with ...
One of the linchpins supporting the U.S. Treasury (UST) market in recent years has been the relative yield advantage against the rates that have existed among the sovereign debt of other G7 nations. In the post-U.S. presidential election landscape, fixed income investors have witnessed a back-up in G7 government bond yields on a global basis, and questions have arisen as to whether said advantage would remain a key contributor to the UST market outlook in 2017, now that the “zero rate club” has shrunk. The best way to answer this query is to examine just who exactly has been buying and who’s been selling, with the first data poi...
My Trading Journal for the DJIA Today: Nasdaq still doesn’t look so bad, Russell index does look pretty rough, the S&P 500 is giving up all of Wednesday’s market rally, but the DJIA managed to hold that 10-day moving average with a three day pullback that was quite shallow in nature. If it holds, who knows, maybe a 3x Dow ETF could come into play and provide a nice risk-reward opportunity for traders. But it will need to show a clean bounce off of the 10-day MA for that to happen. I’ve been harping on this indicator quite a bit lately, but it bears mentioning: the T2108 is looking disastrous. It broke through key su...
Video length: 00:09:01 It’s another quiet morning on the DXY Index front, as market participants await tomorrow’s ECB rate decision and Friday’s US Nonfarm Payrolls report. While the European Central Bank rate decision is expected to be rather dull – no change in rates or the QE program are anticipated – the Euro has shown a proclivity to experience a bump in volatility during ECB President Mario Draghi’s press conference (even if direction is nary found). French election headlines remain the main focus, and with recent polls showing that the odds of a Marine Le Pen victory in a second round runoff ...
The Saudi Oil Minister, Khalid Al-Falih, says that OPEC cuts have exceeded expectations of 1.5 million barrels of oil a day, but you would not know it by the jaw dropping 11.6-million-barrel crude oil increase reported by the American Petroleum Institute (API). Even with a bullish 5-million-barrel drop in gasoline supply, the largest weekly drop since April of 2014, and a supportive 2.9-million-barrel drop in distillates the shock value of that massive crude oil build was too hard to just shake off. We know that the U.S. said that they would be selling 10 million barrels of oil from the Strategic Petroleum Reserve (SPR) last month and it is p...
Last week, in an abrupt shift to his bullish posture, Bank of America strategist Michael Hartnett laid out how he envisioned the transition from the current “Icarus” rally to what he dubbed the market’s “Great Fall” – or “Humpty Dumpty” trade – which he expected to take place in the second half of the year, and which he said would be precipitated by another downward inflection in EPS, but more importantly, a more hawkish Fed. Specifically, he showed a chart which revealed that historically, once the Fed starts tightening, it keeps tightening until there is a “financial event.” Overni...
The Pound Sterling fell against the US Dollar, dipping to a 7-week trough as investors await the release of the British budget. The finance minister is expected to raise his economic forecasts, but analysts believe that Philip Hammond is also likely to talk up new targets that would curb the UK’s large fiscal deficit. Included in his plan is also likely to be proposals for taxes and spending. Among the G7, the UK has the second fastest growing economy, driven largely by consumer spending. As reported at 10:22 am (GMT) in London, the GBP/USD was trading 0.34% lower at $1.2161; the pair earlier hit a trough of $1.2159 while the peak was at $1...
For the world as as a whole, exports need to equal imports. Thus, the large US trade deficits are necessarily offset, out there in the world economy, by equally large trade surpluses in other countries. From a global perspective, these offsetting surpluses are largely in three countries: China, Germany, and Japan. Here’s are some statistics from the IMF last October showing trade balances around the world. The US trade deficits are near the top. Two lines lower, you can see the large German trade surpluses. Four lines below that are the large trade surpluses for Japan. Further down, under the category of “Emerging and Developing...