The underlying fundamentals of oil and energy remain highly negative. Oil prices have been supported by sentiment for some time now, but that hasn’t changed much from between under $30 to over $40 at the front end. In the latest weekly update from the US EIA, domestic oil production fell rather sharply in the last week of April. It was [...]
The front end of the oil price complex continues to get all the attention because it seems to further the more optimistic narrative. It is the back end, however, that is most significant. The nearer maturities of the futures curve reflect more the funding environment than the fundamental view of oil and the economy. The lack of continued liquidation has [...]
The mainstream view of the unemployment statistics suggest that any weakness in the US economy, manufacturing or beyond, will be temporary and shallow because employment growth remains robust. The question is not whether the statistics suggest such a trend but rather if those accounts correspond with anything real. As noted earlier this week, even the Federal Reserve’s relatively new measure [...]
It is remarkable the disparity in views on display by various markets and what that suggests about what is driving each. In stocks and especially junk bonds, you get the sense of a massive sigh of relief that “it’s all over”, and while scary for a time it’s back to momentum and not missing out on the big money bargains. [...]
It’s never a good sign when bank stocks are leading any retreat, but that is especially the case given recent events when several high profile banks were at the epicenter of early 2016’s liquidation rerun. As usual, Deutsche Bank and Credit Suisse are the firms most mentioned and among those most disfavored at these times. The media struggles to find [...]
Calculated “inflation” in Europe disappointed again in March, as for the second month in a row the HICP rate was below zero. There had been some hope after the German version turned just slightly positive that it would herald a different sign for the rest of Europe. Instead, inflation rates in other places were mostly the same; Spain stuck at [...]
The fundamentals for crude oil continue to be atrocious. Production remains relatively stable if slightly reduced, which is about the only factor in favor of oil prices since the February 11 low. On the other side of the ledger, you don’t hear as much about how it’s all oil supply anymore other than the occasional reference to a “glut” that [...]
In late summer last year, just in time to accompany the first blast of contraindicated economic reality, Statistics Canada announced that Canadian GDP had contracted in Q2 2015. That followed an “unexpected” drop in Canadian GDP in Q1 which was supposed to be like oil prices and only a “transitory” deviation on the road to ultimate monetary policy success. Even [...]
Oil prices remain ebullient, relatively, compared to the dismal start to the year. Everything else, it seems, is driven by that background which means “dollar.” In that respect, we look to China or at least the Asian version of the “dollar” for guidance on triangulating funding conditions and future potential positioning. The CNY exchange is still within the post-Golden Week [...]
From June 2014 until late January 2015, oil prices (WTI) fell about 60%. From June 2015 until late January 2016, oil prices (WTI) fell about 60%. The exact track each annual trading history took to achieve those results is different (2014-15 much more straight ahead and persistent; 2015-16 jagged and irregular), but you can’t deny the repetition in both the [...]
Stay In Touch