Palladium is another element with great importance to the modern economy, but it’s often overshadowed by the other more famous and expensive precious metals. As the chart below shows, palladium has been generally cheaper than platinum – its more expensive substitute in industrial use and jewelry. Chart 1: The palladium to platinum ratio (red line, right axis), the price of palladium (yellow line, left axis, P.M. London Fix, weekly average), and the price of platinum (blue line, left axis, P.M. London Fix, weekly average). However, the palladium to platinum ratio has been approaching parity. Does that mean it is the appropriate moment t...
Back in May, we pointed out an interesting observation made by Goldman: unlike late 2015 and most of 2016, when equities demonstrated surprising resilience to the swoon in oil prices, in 2017 OPEC’s failure to stabilize oil prices finally hit energy equities disproportionately. As Goldman said in mid-May, discussing the latest crude oil sell-off, which has been “even more pronounced for longer-dated contracts reflecting increasing concerns over future balances in 2018 and beyond”… “in the HY market, the Energy sector has again outperformed its beta to crude over the past few weeks, a pattern that is reminisce...
Video length: 00:11:42 The US Dollar has sunk into its lowest levels since August 2016 as the Euro surge following the European Central Bank rate decision yesterday has continued. With the Euro now at a two-year high versus the US Dollar, the DXY Index (being comprised of 57.6% Euro) has been punished. The market reaction to yesterday’s ECB meeting was notable for a few reasons. First, in a lower volume, thinner liquidity environment – part and parcel of summer trading – it’s hard to put too much stock in any one move; participation is too low. Second, European government bond yields fell around ECB President Mario Dra...
The General Electric Q2 2017 earnings and Moody’s Q2 2017 earnings reports were released before opening bell this morning. GE posted adjusted earnings of 28 cents per share on $29.56 billion in revenue, compared to the consensus estimates of 25 cent per share on $29.14 billion in revenue. In last year’s second quarter. The company reported 30 cents per share in earnings on $33.49 billion in revenue. Moody’s reported adjusted earnings of $1.51 per share on $1 billion in revenue, compared to the consensus estimates of $1.34 per share and $959.2 million in revenue. In last year’s second quarter, the firm reported $928.9 million in revenu...
Regular readers know that we, much like at least one or two credit strategists we’ve spoken with at one of the major banks, believe that when it comes to Teflon assets, credit has in fact been the poster child for resilience. Sure, vol. is low across the board, but the extent to which spreads have steadfastly refused to respond (i.e. widen notably and/or sustainably) in the face of myriad geopolitical/policy headwinds, is the picture of absurd. It is of course the same old story about implieds being low because realized vol. is low… …and also because central bank liquidity is keeping things in check, but the point is that it’s patentl...
There are a number of great companies in the market today. By using the ModernGraham Valuation Model, I’ve selected 10 low PE stocks for the Enterprising Investor. These companies have the lowest PEmg (price / normalized earnings) ratio out of all companies reviewed by ModernGraham. Each company has been determined to be suitable for the Enterprising Investor and undervalued according to the ModernGraham approach. Defensive Investors are defined as investors who are not able or willing to do substantial research into individual investments, and therefore need to select only the companies that present the least amount of risk. Enterprisin...
For oil and the markets, Russia is all the rage. There is the big OPEC/non-OPEC pow-wow in Russia and reports that Special Prosecutor Robert Mueller is opening an investigation into President Donald Trump’s business transactions with Russia one day after the President said that that would be a red-line for him. Of course Robert Mueller had no choice. If there is someone who has the job to look for a loaded gun and you tell him not to look for it in the closet, that’s going to be the first place he will look. The report of the widening of the Russia probe did move markets. The dollar took it as a negative, falling to lows. That hel...
The dollar weakened further early Friday morning with no end to the spiral in sight after European Central Bank President Mario Draghi making comments on Thursday afternoon that sent the common currency to near two-year highs against the greenback.The dollar is now 10 percent down against the euro since the start of 2017. The dollar’s recent downtrend was aggravated further last week when Federal Reserve Chair Janet Yellen expressed her concern about the low inflation rate.The dollar weakened further after Donald Trump Jr. admitted to having ties to the Russian government.The failure of President Trump to pass both his healthcare reform bil...
– Canada Consumer Price Index (CPI) to Slow for Second Month in June. – Core Inflation to Hold Steady at Annualized 1.3% for Six Consecutive Months. – Retail Crowd Remain Stubbornly Net-Long USD/CAD Since June 7, When It Traded Near 1.3481. Trading the News: Canada Consumer Price Index (CPI) Another slowdown in Canada’s Consumer Price Index (CPI) may tame the sharp depreciation in USD/CAD as it encourages the Bank of Canada (BoC) to adopt a more gradually path in normalizing monetary policy. Why Is This Event Important: Signs of softer-than-expected inflation may push the BoC to the sidelines as ‘very strong growt...