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Saudi Stocks Slammed As War Worries Trump Dead Crude Bounce
Oil’s late week surge provided much buying excitement and Mid-East equity markets opened with flashing green numbers across every screen. However, by the close, it was a sea of red with Kuwait, Egypt, Amman, and Iraq all lower and Saudi’s Tadawul All Share Index tumbling almost 4% from the opening highs as war worries dragged The Kingdom’s stock market back near 5-year lows. Not “off the lows”… Tumbling near 5-year lows… As Saudi Bank risk begins to rise once again… Which could not be a total surprise as now SonntagsZeriting reports that Qatari state fund and Saudi Olayan Group are reachi... -
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Tesla Motors Inc’s Elon Musk Puts His Money Where His Mouth Is
As investors were holding their breath ahead of earnings from Tesla Motors Inc (NASDAQ:TSLA), CEO Elon Musk attempted to quell concerns by buying up shares of the company as a vote of confidence. As much as the influential CEO touts the stock, investors could not help but notice that shares plummeted 20 percent in the month of January. Investors got the reassurance they needed after Musk made headlines at the end of January by buying up $100 million of Tesla shares. Musk exercised over 500K stock options for an exercise price of $6.63; not a bad deal considering shares were trading at approximately $190 per share. Sources say Musk even a... -
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Q4 Earnings Update: Estimates Finally Improving
There’s no denying that companies were hit hard during the fourth quarter, and we are definitely heading for a year over year earnings decline for the S&P 500. However, earnings estimates are finally improving; they’re up 140 basis points from where they bottomed out on Jan. 27, according to data from S&P Capital IQ. Another bit of good news is that now half of the S&P’s ten sectors are expected to be in the green as Information Technology now looks on track for a very slight earnings increase. Q4 earnings season passes its peak Senior Analyst Lindsey Bell reports today that the aggregate fourth quarter estimates now stand... -
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Recession Probabilities
Our GDP-based recession indicator index is now available from FRED, the database maintained by the Federal Reserve Bank of St. Louis. Source: available from FRED. One use of this series is for academic research where it is important to specify predictive relations based on what market participants could have actually known at the time. The recession dates established by the NBER Business Cycle dating committee (shown as shaded bars in the graph above) were assigned long after the fact. That means if you include the NBER dates in a regression, you are “predicting” variables on the basis of future outcomes, which can lead to all kinds... -
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Will The Gold Mining Industry Continue To Suffer?
Demand for gold will remain strong in the years to come given the demand for jewelry, bars and coins as well as its safe-haven appeal. Yet the gold mining industry is saddled with a number of headwinds. Below, we discuss some of the key challenges and what investors in the sector can look forward to in the coming months and years. Lack of New Projects, Production to Flatten Annual mine production grew for the sixth straight year in 2014, edging up 2% to a record 3,114.4 tons. However, after a long period of growth, gold production dipped by 1% in the third quarter of 2015. While output is slowing down from older mines, particularly in South A... -
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Gold Rockets To Fresh Highs As Equity Rout Continues
Gold prices soared for a fourth consecutive week with the precious metal rallying more than 5% to trade at 1247 on Thursday evening in New York. The advance to fresh yearly highs comes amid the continued rout in global equity markets with weakness in the dollar & falling treasury yields driving demand for the perceived safety of the yellow metal. Fundamental Forecast for Gold: Neutral In her two-day semi-annual Humphrey Hawkins testimony before congress, Fed Chair Janet Yellen maintained that the central bank is staying with a wait-and-see approach as it pertains to normalizing monetary policy while at the same time leaving the door o... -
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Citi: “There Was Something About The Entire Recovery Narrative That Is Downright Wrong”
Yesterday, we laid out what according to Citi’s Matt King, one of the most insightful and respected credit analysts in the world, is most surprising about the ongoing market selloff: the odd interplay between some asset classes which are declining in an orderly, almost boring fashion, and other assets which have crossed into and beyond a state of existential panic. The reason for this ongoing paradox is still unclear but as Citi’s King, BofA’s Martin and Hartnett, and DB’s Konstam and Reid have all hinted on numerous occasions, the fundamental driver of everything that is wrong with the market are the actions of the ... -
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Bank Stocks Will Rebound When Interest Rate Expectations Increase
What’s down with banks? Stock prices for the industry have fallen much more than the overall stock market index. The KBW bank index has dropped about 20 percent (as this is being written) from the end of last year, though the S&P 500 is only down nine percent. Banks have been hit worse because of dashed expectations for a rising interest rate environment which experts—and even I—predicted would be a boon to bank earnings. For most of the past few decades, bank interest payments to depositors were about a percentage point less than treasury bill yields. (Banks didn’t pay interest on regular checking accounts, but you can think ... -
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February 15th Binary Options Trading Opportunities
During the day on Monday, we get almost nothing as far as announcements are concerned. We do have a speech by the European Central Bank president, but beyond that there probably won’t be too much noise in the markets. Natural gas falling The natural gas market initially tried to rally during the day but turned right back around at the $2 level. Because of this, it appears that we are going to see more bearishness in this market. Put buying below the bottom of the range for the session is more than likely going to be the way going forward, just as it would be the way to trade any short-term rallies. USD/CAD grinding away The USD/CAD pair ... -
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China Is Back And The Mood Matters
The world’s second largest economy could not be blamed for the recent rout as it was on holiday. And now it’s back. Can China provide the stimulus that other countries failed to deliver? We also have GDP from Japan, wages from the UK and inflation in the US: the big focus is on the Fed of late. In addition, forex traders should keep their eyes open on movements in stocks and oil. The mood matters. This is a video preview for the week of February 15-19: ...
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