With no major economic data released, Wednesday was a bit of a nothing-burger on the day. The Dow lost some ground while the other indices finished modestly to the upside.
There was more interest in the 10-year note, as the Treasury auctioned off $23 billion on what was deemed a very weak sale at a yield 2.333%.
Also making some headlines was WTI crude oil, which fell below $52 per barrel, after the American Petroleum Institute (API) said crude inventories rose by 14.2 million barrels, the second largest weekly build in the series.
The dull session comes as Q4 2016 earnings are winding down, and there hasn't been much in the way of good news from the corporate sector. Conversely, not many companies have been lowering forecasts, leaving investors in an area of suspense about which direction the market may go next.
At The Close, Tuesday, February 8, 2017:
Dow: 20,054.34, -35.95 (-0.18%)
NASDAQ: 5,682.45, +8.24 (0.15%)
S&P 500: 2,294.67, +1.59 (0.07%)
NYSE Composite: 11,252.31, +8.93 (0.08%)
Showing posts with label oil glut. Show all posts
Showing posts with label oil glut. Show all posts
Wednesday, February 8, 2017
Tuesday, April 12, 2016
Bad News Sends Stocks, Oil, Higher; Silver Outshines All
Stocks moved higher based on nothing other than an "informed diplomatic source" that said Russia and Saudi Arabia had agreed to freeze oil production. Along with stocks, oil futures moved notably higher, topping $41.50 a barrel.
The news was taken with so much enthusiasm that traders apparently forgot that there exists a worldwide glut of crude oil larger than any before it. They also disregarded obvious topping patterns in stocks and upcoming earnings reports, including those of the big banks which happen to be saddled with bad oil loans.
News that the IMF cut its global growth forecast for 2016 for the fourth time in a year, backing it off to 3.2%, was also disregarded, as was the US March budget deficit came in at double what it was last year, a whopping $108 billion.
In an unrelated move, silver continued its non-stop ascent, closing in New York at its highest price since late October of 2015, topping $16/ounce for the first time this year. The price of silver has risen more than 8% in the past week.
S&P 500: 2,061.72, +19.73 (0.97%)
Dow: 17,721.25, +164.84 (0.94%)
NASDAQ: 4,872.09, +38.69 (0.80%)
Crude Oil 41.56 +2.97% Gold 1,257.40 -0.05% EUR/USD 1.1390 -0.12% 10-Yr Bond 1.78 +3.31% Corn 361.25 +1.26% Copper 2.15 +2.85% Silver 16.22 +1.50% Natural Gas 2.02 +5.60% Russell 2000 1,105.71 +1.04% VIX 14.85 -8.67% BATS 1000 20,682.61 0.00% GBP/USD 1.4269 +0.24% USD/JPY 108.5655 +0.57%
The news was taken with so much enthusiasm that traders apparently forgot that there exists a worldwide glut of crude oil larger than any before it. They also disregarded obvious topping patterns in stocks and upcoming earnings reports, including those of the big banks which happen to be saddled with bad oil loans.
News that the IMF cut its global growth forecast for 2016 for the fourth time in a year, backing it off to 3.2%, was also disregarded, as was the US March budget deficit came in at double what it was last year, a whopping $108 billion.
In an unrelated move, silver continued its non-stop ascent, closing in New York at its highest price since late October of 2015, topping $16/ounce for the first time this year. The price of silver has risen more than 8% in the past week.
S&P 500: 2,061.72, +19.73 (0.97%)
Dow: 17,721.25, +164.84 (0.94%)
NASDAQ: 4,872.09, +38.69 (0.80%)
Crude Oil 41.56 +2.97% Gold 1,257.40 -0.05% EUR/USD 1.1390 -0.12% 10-Yr Bond 1.78 +3.31% Corn 361.25 +1.26% Copper 2.15 +2.85% Silver 16.22 +1.50% Natural Gas 2.02 +5.60% Russell 2000 1,105.71 +1.04% VIX 14.85 -8.67% BATS 1000 20,682.61 0.00% GBP/USD 1.4269 +0.24% USD/JPY 108.5655 +0.57%
Wednesday, December 30, 2015
Doubtful That Stocks Will Post Gains for 2015
Stocks took a nosedive into the close, with the three major indices closing at the lows of the session.
More than likely, traders are taking whatever they've made and walking away, as there is only one more day left to buy, sell or hold in 2015.
Crude got hit again and should test the December lows once January commences and the realization that global GDP is going to come in at under two percent or thereabouts for the year. As mentioned earlier, US fourth quarter GDP - which will be first estimated nearing the end of January - will have to measure in the range of 2.8%, which will be a real stretch, as holiday sales have not been very robust and housing - as evidenced again by pending home sales in November, came in at -0.9%, well below already tame estimates of a gain of 0.5%.
Crude Oil closed at 36.65, down 3.22%; Gold and silver were ambushed once more by the global cartel and the ten-year note finished just about where it did yesterday,yielding 2.30%, a pretty good jump of 7-8 pips from the close on Monday.
Natural Gas ended at 2.22, off 6.41%, after a big run-up based upon projections of a colder January for the Northeast via a European model. NOAA's three-month forecast for January-March remains unchanged, showing a warmer than normal winter for much of the Northeast and Midwest. So much for the rapid rise off generational lows. Like oil, there's an absolute glut of Nat Gas, a positive boost for consumers. Storage facilities in the Northeast are near record capacities.
If history is any guide, consumers will continue paying down debt if oil, automotive fuel and natural gas continue to trade at lowered levels. Wall Street may like like the idea, but Main Street is relishing the break from a near-decade of high prices.
Outside of the insanity that is the NASDAQ, a loser close on the S&P will send 2015 investors home flat or losers on the annum. The Dow looks to have no chance to finish in the black for the year.
Here are closing prices at the end of 2014:
S&P: 2,058.90
Dow: 17,823.07
NASDAQ: 4,736.05
Wednesday's closing prices:
S&P 500: 2,063.36, -15.00 (0.72%)
Dow, 17,603.87: -117.11 (0.66%)
NASDAQ, 5,065.85: -42.09 (0.82%)
It's not looking very pretty and January appears to be setting up for a dramatic sell-off.
Tomorrow: Money Daily's Forecasts for 2016
More than likely, traders are taking whatever they've made and walking away, as there is only one more day left to buy, sell or hold in 2015.
Crude got hit again and should test the December lows once January commences and the realization that global GDP is going to come in at under two percent or thereabouts for the year. As mentioned earlier, US fourth quarter GDP - which will be first estimated nearing the end of January - will have to measure in the range of 2.8%, which will be a real stretch, as holiday sales have not been very robust and housing - as evidenced again by pending home sales in November, came in at -0.9%, well below already tame estimates of a gain of 0.5%.
Crude Oil closed at 36.65, down 3.22%; Gold and silver were ambushed once more by the global cartel and the ten-year note finished just about where it did yesterday,yielding 2.30%, a pretty good jump of 7-8 pips from the close on Monday.
Natural Gas ended at 2.22, off 6.41%, after a big run-up based upon projections of a colder January for the Northeast via a European model. NOAA's three-month forecast for January-March remains unchanged, showing a warmer than normal winter for much of the Northeast and Midwest. So much for the rapid rise off generational lows. Like oil, there's an absolute glut of Nat Gas, a positive boost for consumers. Storage facilities in the Northeast are near record capacities.
If history is any guide, consumers will continue paying down debt if oil, automotive fuel and natural gas continue to trade at lowered levels. Wall Street may like like the idea, but Main Street is relishing the break from a near-decade of high prices.
Outside of the insanity that is the NASDAQ, a loser close on the S&P will send 2015 investors home flat or losers on the annum. The Dow looks to have no chance to finish in the black for the year.
Here are closing prices at the end of 2014:
S&P: 2,058.90
Dow: 17,823.07
NASDAQ: 4,736.05
Wednesday's closing prices:
S&P 500: 2,063.36, -15.00 (0.72%)
Dow, 17,603.87: -117.11 (0.66%)
NASDAQ, 5,065.85: -42.09 (0.82%)
It's not looking very pretty and January appears to be setting up for a dramatic sell-off.
Tomorrow: Money Daily's Forecasts for 2016
Monday, December 28, 2015
Santa Takes a Little Off the Top
Stocks fell today, first hard, then made a daylong comeback to close near the unchanged mark.
It was rather a random day in the world of high finance. Ten-year and 30-year treasuries each closed off a pip, 2.21 and 2.93, respectively, while the 2-year note budged upward from 0.97 to 0.98, tightening and flattening the spread. It wasn't a monumental move, but noticeable to anyone paying attention. The market didn't really appreciate the boost in the fed funds rate and the displeasure is being voiced by various, subtle means, like the desperation in high yields, and the shut-off of the banking spigot that funded stock buybacks for most of the last five years.
It's probably better, right now, to keep a close eye on the bond market. It may turn out to be the place for volatility and profit in 2016, especially if the Federal Reserve follows through on their plans for three or four more rate hikes by this time next year. That is an unlikely event, though "normalization" is what the Fed continues to say they are aiming for, though a truly normal economy won't likely materialize for three or four more years, if they're lucky.
To have a 10-year treasury yielding 4-5% would be quite an accomplishment by 2019 or 2020, considering all the damage already done by over a decade of fed fund rates at one percent or lower.
Equity markets were decidedly dull, as there are few trades to be made of any importance this late in the game, though the markets are still well below all-time highs reached in May, especially the broad gauge of the S&P, which cannot seem to get out of its own way.
Today was mostly gibberish, as will likely be the case the remainder of the week, and the year. It's hard to draw any conclusions from the last week's trading in a calendar year. The first week of January will be much more insightful.
WTI crude was slapped back down from last week's euphoric and ridiculous closing level, finishing the day at 36.72/barrel. Anyone calling a bottom around here just hasn't considered the slack in the economy and the production glut facing producers. It's a huge problem, but nobody wants to cut production, even at these lower prices, constituting a possible new normal.
S&P 500, 2,056.50, -4.49 (0.22%)
Dow, 17,528.27, -23.90 (0.14%)
NASDAQ, 5,040.99, -7.51 (0.15%)
It was rather a random day in the world of high finance. Ten-year and 30-year treasuries each closed off a pip, 2.21 and 2.93, respectively, while the 2-year note budged upward from 0.97 to 0.98, tightening and flattening the spread. It wasn't a monumental move, but noticeable to anyone paying attention. The market didn't really appreciate the boost in the fed funds rate and the displeasure is being voiced by various, subtle means, like the desperation in high yields, and the shut-off of the banking spigot that funded stock buybacks for most of the last five years.
It's probably better, right now, to keep a close eye on the bond market. It may turn out to be the place for volatility and profit in 2016, especially if the Federal Reserve follows through on their plans for three or four more rate hikes by this time next year. That is an unlikely event, though "normalization" is what the Fed continues to say they are aiming for, though a truly normal economy won't likely materialize for three or four more years, if they're lucky.
To have a 10-year treasury yielding 4-5% would be quite an accomplishment by 2019 or 2020, considering all the damage already done by over a decade of fed fund rates at one percent or lower.
Equity markets were decidedly dull, as there are few trades to be made of any importance this late in the game, though the markets are still well below all-time highs reached in May, especially the broad gauge of the S&P, which cannot seem to get out of its own way.
Today was mostly gibberish, as will likely be the case the remainder of the week, and the year. It's hard to draw any conclusions from the last week's trading in a calendar year. The first week of January will be much more insightful.
WTI crude was slapped back down from last week's euphoric and ridiculous closing level, finishing the day at 36.72/barrel. Anyone calling a bottom around here just hasn't considered the slack in the economy and the production glut facing producers. It's a huge problem, but nobody wants to cut production, even at these lower prices, constituting a possible new normal.
S&P 500, 2,056.50, -4.49 (0.22%)
Dow, 17,528.27, -23.90 (0.14%)
NASDAQ, 5,040.99, -7.51 (0.15%)
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