Inventories will continue to rise, but the momentum is slowing. The following are some observations as to how we got here and how we’re gonna get out. 9 reasons why oil has taken so long to bottom: 1. OPEC increased production in 2015 to multiyear highs, principally in Saudi Arabia and Iraq where production between the two added 1.5 million barrels per day (mb/d) to inventories after the no cut stance was adopted. 2. Russian production increased in 2015 to post Soviet highs. 3. Long planned Gulf of Mexico production began coming on in late 2015. 4. An overhang of 3,000 or 4,000 shale wells that were drilled but uncomplet...
Podcast: Play in new window | Play in new window (Duration: 13:16 — 6.1MB) DOW + 282 = 16,167 SPX + 26 = 1903 NAS + 49 = 4567 10 Y – .03 = 1.99% OIL + .11 = 30.45 GOLD + 11.80 = 1120.70 The Federal Reserve had always planned to pause after raising interest rates in December, but the question now is how long that break will last. Initial expectations were that the FOMC would raise rates again this March, but a downturn in the equity markets, a stronger dollar and weak inflation have led some to predict that another move may be months away. Investors may get some more insight as Fed officials gather today for a two-day session, their f...
What’s the “official” unemployment rate vs. economic reality? In my analysis of the monthly jobs reports on the first Friday of the month, I make a statement similar to this: “The official unemployment rate is 5.0%. However, if you start counting all the people who want a job but gave up, all the people with part-time jobs that want a full-time job, all the people who dropped off the unemployment rolls because their unemployment benefits ran out, etc., you get a closer picture of what the unemployment rate is. That number is 9.9%. Some of those dropping out of the labor force retired because they wanted to retire. Th...
The financial service industry’s Prime Directive is to exploit humanity’s core drives of Greed and Fear. Financial service companies promise high returns (fulfilling our greed) that are low-risk, i.e. “safe” (placating our fear of losing our nest-egg). But the safety of many supposedly low-risk investments is illusory. The risk is not actually near-zero; rather, the risk has been buried, masked or obscured, for the obvious purpose of persuading the marks (i.e. the investing public, non-financial institutions, etc.) that the promised gains are essentially risk-free. One example of selling the illusion of safety is the...
We had large 11 million plus build in oil inventories according to API, we will see if tomorrow`s EIA report confirms this large number. The shorts will be geared up for another attack on the market for Wednesday....
Today I presented our 2016 inflation forecast to the investment committee for a multifamily office, and when I was putting the presentation together I developed one slide that really is a must-see for investors in my opinion. For some time, TIPS have been too cheap. Really, it has been more than a year that our metrics have shown inflation-linked bonds as not just cheap, but really cheap compared to nominal bonds. I don’t mean that real yields will fall – so this isn’t a statement about whether I am bullish or bearish on fixed-income. Frankly, I am somewhat conflicted on that point at this moment. Rather, it is a statement about what ...
Photo Credit: Charis Tsevis Key Takeaways The Estimize consensus calls for EPS of $0.69 and revenue of $5.385 billion, right in line with Wall Street’s estimates Facebook (FB) no longer relies solely on ad revenue and has now developed new sources of revenue stream, largely contributing to its booming growth. Facebook continually reports double the monthly active users (MAU) and daily active users (DAU) of its peers, Twitter (TWTR) and Linkedin (LNKD). What are you expecting for FB? Get your estimate in here! FB data by YCharts The social media darling, Facebook (FB), is poised to close an impressive 2015 when it reports fourth quar...
The worst yearly start for U.S. stocks ever – even worse than scary years like 1929, 1987, 1974, 2000, and 2008 – should get your attention. If you’ve been hiding underneath a rock or hibernating in a cave-like dwelling, it’s time to come out. “A little sunlight is the best disinfectant,” as Judge Brandeis might say. Most global stock yardsticks from China to Japan and even the United Kingdom have crashed 20% or more. Thankfully, the Dow Industrials, Nasdaq Composite, and S&P 500 are not yet in a bear market. That’s the good news. The bad news is since the average investor (both amateur and prof...
I joined CNBC’s Martin Soong to chat about McDonald’s (MCD) earnings. All in all, things are looking up for Mickey D’s. The turnaround seems to be getting traction, and same-store sales are up sharply. It’s been a long time since we could say that. Where does McDonald’s stock go from here? After the big move, the easy money has been made. But I expect McDonald’s to at least perform as well as the broader market....
More landmines than goldmines – that has been our view about equity markets, as well as other economic or geopolitical repercussions, for a long time. And so we’ll begin with a chat that’s primarily about Apple (AAPL) and how it’s impacting the markets. As does the return of buybacks from WellsFargo (WFC) they were allowed is curious in itself); and a mediocre report (I’d say a slight miss) from AT&T (T). Also I’d like to point-out a couple geopolitical issues which are largely ignored as risks to the markets (including currencies). One is the expansion of ISIS beyond the Middle East, to Afghanistan (...