The market rally finally seemed to flag on Monday and the Dow fell below 21,000 for the first time since breaching this barrier on Mar 1. Geopolitical tensions and fresh allegations made by President Trump against his predecessor combined to drag stocks lower. Also adding to investors’ worries was an imminent rate hike, following indications to that effect by Fed Chair Janet Yellen. In Europe, the fate of stocks was somewhat similar, partly due to the upcoming rate hike. However, most of the losses for the day were caused by disappointing news from Deutsche Bank AG (DB – Free Report) . This was a notable departure from recent trends...
The RBNZ Governor Wheeler gave a speech last week in Auckland where he defended the RBNZ’s policy decision to keep interest rates steady. He said that there were significant downside risks to the outlook for the global economy, especially the protectionist policies from the new U.S. administration. On the domestic front, the RBNZ Governor highlighted the imbalances in the housing markets as the main risk. Markets have been speculating on when the RBNZ will be hiking interest rates next. It is almost a certainty that the next policy change from the RBNZ will be a hike in interest rates, but it is now a question of when. The OCR is expected r...
The headlines say consumer credit rate of annual growth SIGNIFICANTLY decreased from last month. Our analysis agrees. Analyst Opinion of the Consumer Credit Situation Not only does this data set suffer from backward revision (moderate to significant enough to change trends), but the use of compounding (projecting monthly change as annual change) by the Federal Reserve to determine consumer credit growth rates exaggerates the volatility in this data. This month the headlines showed significant deceleration of consumer credit growth – and our analysis is that the rate of growth slowed moderately. the default rate of consumer loans is now ...
Following President Trump’s speech the Dow Jones Industrial Average (Dow) easily broke 21,000, and closed at another all-time high – 21,115. The Dow closed up for the 12th consecutive day on Monday February 27, another three decade record. Excel calculated the Dow’s daily Relative Strength Index (RSI – 14 period), a technical timing oscillator. It reached 97.75 (maximum = 100.00) on March 1, an exceptionally “over-bought” reading that has occurred nine times since 1950. The weekly RSI also reached a very high “over-bought” reading as of March 3, the end of last week. Margin debt recently registered an all-time high on the...
In Part 1 of Possible Acquisitions in the Permian, we covered J. Cleo as one of the premiere private operators in the southern Delaware Basin. Given the opportunities in the area, acreage prices have increased significantly. The map below provides some of the larger acquisitions by publicly traded companies. Adjusted acreage values in southern Reeves are in the $30K to $35K range. Concho’s (CXO) acknowledgement that there is little value in the western Permian, seems to point to increasing acreage prices in the near term. The only question is which operators are willing to pay. Increasing acreage valuations could push Delaware players...
USD/JPY 4 hour The USD/JPY seems to be retracing within a wave 2 (brown) back to the Fibonacci levels which could act as support. The wave 1-2 (brown) structure is invalidated once price breaks below the bottom (blue). 1 hour The USD/JPY is building an ABC (orange) within wave 2 (brown) and could retrace back to the Fibonacci levels of wave 2 vs 1 (brown). EUR/USD 4 hour The EUR/USD remains between a support (green) and resistance trend line (red), which mark the borders of the corrective zone. A break above resistance (red) could see price move higher to test the Fibonacci levels of wave 2 (purple) but a push above the 100% level invalidates...
When the headline prints hit tonight on China’s trade data, offshore Yuan dipped and ripped… As China faced its first trade deficit in 3 years (-$60bn vs +172.5bn exp)… Obviously there is some major seaonality… With imports exploding 44.7% YoY (and exports missing expectations dramatically +4.2% vs +14.6% exp). But it appears the economists forgot about this year’s lunar new year holiday falling in January (vs Feb last year). As Bloomberg points out, the results were skewed because the week-long Lunar New Year holidays that shutter factories and ports across the nation occurred in February 2016 versus late Jan...
Podcast: Play in new window | Play in new window (Duration: 13:15 — 7.6MB) DOW – 29 = 20,924 SPX – 6 = 2368 NAS – 15 = 5833 RUT – 9 = 1374 10 Y + .02 = 2.51% OIL – .16 = 53.04 GOLD – 9.70 = 1216.40 Healthcare stocks were in focus yesterday after the GOP unveiled its Obamacare replacement bill, called the American Health Care Act. The bill rolls back the Medicaid expansion and eliminates the individual mandate, which requires everyone to buy health insurance. Under the ACA, tax credits were provided to 85% of people enrolled in the exchanges, and the amount of the subsidy was determined based on income level, geographic ...
AT40 = 48.9% of stocks are trading above their respective 40-day moving averages (DMAs)AT200 = 63.5% of stocks are trading above their respective 200DMAsVIX = 11.5 (volatility index)Short-term Trading Call: neutral Commentary Market weakness continued to grow yesterday even as the major indices barely notched losses on the day. AT40 (T2108), the percentage of stocks trading above their respective 40-day moving averages (DMAs), did something it has not done in 79 trading days: it closed below 50%. AT40 has now erased all but four trading days of post-election gains. AT40 (T2108) close at a level last seen shortly after the November U.S. Pre...
The price of Crude Oil looks to be aligning with the backwardation that recently came to pass where the front month futures contract was trading at a premium to futures contracts a few years out. A driver for the support of the Oil price has been a hope that OPEC would extend supply cuts beyond summer. However, on Tuesday, Suhail Al Mazrouei, UAE Minister of Energy cast doubt on the certainty that OPEC will extend cuts. Al Mazrouei said the level of inventories is dropping slower than expected, which is likely either to the aggressively supply from the US Shale or the lack of demand. Signs out of CERA Week in Houston appear promising for...