Markets Focus On Earnings Results
Earnings remain front and center in today’s session, with weak reports from bellwethers in the technology and industrials spaces in the spotlight. The earnings cycle really heats up next week, with more than 170 S&P 500 members coming out
Negative Rate Loans? USD/JPY Blows Through 110
Market Drivers April 22, 2016 BOJ Considers negative rate loans EZ Flash PMIs miss Nikkei 1.20% Dax -0.37% Oil $43/bbl Gold $1250/oz. Europe and Asia : EZ Composite PMI 53 vs. 53.3 North America : CAD CPI 8:30 CAD Retail Sales 8:30 USD/JPY blew through the psychologically key 110 level in late Asian trade
Talking Out Of One's Orifices
I have no love for opinion masquerading as economic fact. Opinion is when there is little or no data in support of a conclusion. All too often, any economic “data” used is cherry picked (ignoring data points to the contrary) or anecdotal. I was schooled as an engineer, and built mega-projects around the world. I
Why Are Bankrupt Oil Companies Still Pumping?
A central tenet in the thesis by analysts about the oil markets rebalancing has been that as prices declined, oil companies would be forced into bankruptcy. That in turn would lead to declining production, and eventually a rebalancing of supply and demand in the market, followed by higher prices. That process is
Why today’s bond environment is different (in 4 charts)
Over the last seven years as central banks have rolled out more quantitative easing programs and moved benchmark interest rates below, or close to, zero global fixed income markets have dramatically changed. Here’s a quick look at four
Markets Appear On Track For A Flattish Open
Stocks appear on track for a flattish open to today’s session, with oil prices essentially unchanged, no surprises from the ECB and the barrage of Q1 earnings reports broadly beating depressed expectations. Central banks have always been key players
Oil Bubble Is Likely To Burst, Taking CAD With It
Marshall Gittler, Head of Investment research, FXPRIMUS.com The price of oil rebounded from its lows earlier this year on hopes that OPEC and non-OPEC countries (principally Russia) can get together and agree to rein in production. Those hopes were dashed on Sunday when the meeting failed to reach any agreement
ECB Takes Center Stage
The ECB meeting is the session’s highlight. In recognition of the risk that ECB President Draghi expresses displeasure with the premature tightening of financial conditions through the exchange rate channel is encouraged a modest bout of euro selling. The single currency has drifted back toward the lows seen at
Weak UK Retail Fails to Rattle Pound
Market Drivers April 21, 2016 UK Retail Sales miss badly All eyes on ECB Nikkei 2.70% Dax -0.24% Oil $44/bbl Gold $1261/oz. Europe and Asia : GBP UK Retail Sales -1.3% vs. -0.1% GBP UK PSNB 4.8B vs. 6.0B North America : EUR ECB Presser 8:30 USD Philly Fed 8:30 USD Weekly Jobless 8:30 UK Retail Sales missed
Markets On Track For A Flat Open Amid Mixed Earnings
The major indexes are on track for a flat open despite a parade of mixed Q1 earnings releases and weakness in oil prices . Stocks have made solid gains in recent sessions, pushing the S&P 500 index above the
Distress Testing the Efficient Frontier
Many historically inclined residents of White Plains, New York can recount the legend of Sleepy Hollow and what inspired it. The day was October 31, 1776 and our young Revolution raged on. One that day, so stirred by his witnessing of an incident on the Merrit Hill battlefield was American General William Heath
Bulls' Charge Stalls, While Greenback Consolidates Losses
The US dollar has been largely confined to yesterday’s ranges against the major currencies. China’s yuan slipped lower for the first time in four sessions, while the Shanghai Composite fell 2.3%, the most since the end of February. While a few equity markets in Asia managed to follow suit after US equity market
Brexit Starting to Take Toll on UK Economy
Market Drivers April 20, 2016 UK Claimant Count rises for first time since August 2015 Wage growth slows Nikkei 0.19% Dax -0.1% Oil $41/bbl Gold $1249/oz. Europe and Asia : GBP UK Claimant Count 6.7K vs. -10K GBP Average Wage Gains 1.8% vs. 2.1% GBP Unemployment 5.1% vs. 5.1% North America : CAD Wholesale
Markets Ignore Mixed Earnings And Weak Housing Report
Stocks appear to be taking their cue from the positive momentum in global oil prices , ignoring the pull from mixed earnings reports and a soft housing starts read. The March housing starts and permits numbers came in weaker
Forget Doha. The Fundamentals Are Moving In The Right Direction
I really don’t think it matters what happened at the OPEC + Russia meeting in Doha, Qatar on April 17. Agreements between those characters don’t have any enforcement provisions and the countries all have a long history of cheating. However, Saudi Arabia and Russia are losing so much money at today’s price of oil that
5 Possible Indicators of a Market Reversal
If you have been reading “Market Musings” over the last few days you will be aware that I am, somewhat uncharacteristically, a little nervous and bearish with regard to stocks in the near future. As yesterday’s action showed, however, we are still in a recovery and the default direction for the market is upward.
Stocks Are On Track For A Modestly Lower Open
Stocks are on track for a modestly lower open, with the drop in oil prices as the primary catalyst today. We are entering the heart of the Q1 earnings season as well, with more than 100 S&P 500 members
Doha, Oil, AUD and Euro
After the Doha meeting of oil producers, the Canadian dollar should be trading much lower but instead of falling, the loonie ended the day higher versus the greenback. To be clear, at the start of the European session, USD/CAD rose within 10 pips of 1.3000 and was still trading above 1.2900 at the North American
Week Ahead: Bad News and a Bad Chart Point To Rough Week For Stocks
As difficult as it sometimes is on a Monday morning, I try in these “Week ahead” pieces to be as positive as possible. There is enough fear in the modern world without me adding to it. When you take a step back and take a big picture view the U.S., and indeed the world, is still struggling through a recovery; an
OPEC Report Suggests Massive Oil Price Rebound
The headlines reacting to OPEC’s April Oil Market Report generally read “OPEC concerned about global oil demand” and as such, oil prices traded down slightly on April 13, despite an overall positive market. Well, I’m concerned about global oil demand also, so I thought I better read their report. Clearly, the
Citibank To Report Q1 Earnings Today
Citibank ( C ) is the latest of the big banks to report Q1 earnings early this season, fitting the narrative established this week by peers like JPMorgan ( JPM ). Bank of America ( BAC ) missed by
Why the S&P 500 Chart Suggests Caution for Investors
I am not usually one for a lot of technical analysis, particularly when it comes to broad measures of the market. Even for individual stocks, fundamental factors are far more important for future pricing than what happened in the past, and that is even more so when you look at a market index such as the S&P 500.
FX: Better Chinese Data Fails to Deter Pre-Weekend Profit-Taking
China’s slew of economic data lends credence to ideas that the world’s second-largest economy may be stabilizing. However, the data failed to have a wider impact on the global capital markets, including supporting Chinese equities. In fact, the seven-day advance in the MSCI Asia-Pacific Index was snapped with a
FX Market: Aussie Holds High Off Chinese Data
Market Drivers April 15, 2016 CNY data beats EZ Trade Balance in line Nikkei -0.37% Dax 0.55% Oil $41/bbl Gold $1231/oz. Europe and Asia : CNY GDP 6.7% vs. 6.7% CNY IP 6.8% vs. 6.7% Retail Sales 10.5% vs. 10.5% EUR Trade Balance 20.2B vs. 21.9B North America : CAD Manufacturing Sales 08:30 USD Empire 8:30 USD
The Consumer Debt Ceiling
Whenever I think that consumer credit growth must be nearing the tipping point, the next month consumer credit grows again. After all, logic dictates the more debt grows the harder it becomes to repay the debt and still be able to buy necessities. The graph below shows the ratio of consumer credit outstanding to
Putting The MetLife Decision Into An Economic Context
By The Federal Reserve Bank of Atlanta By Larry D. Wall, executive director of the Atlanta Fed’s Center for Financial Innovation and Stability In a recently released decision, a U.S. district court has ruled that the Financial Stability Oversight
AUD Hits New Highs but Here's Why the Rally May Not Last
At the start of the week, we said the Canadian and Australian dollars could hit new multi-month highs and now that these milestones have been reached, we are weary of a correction in both currencie s. For the Canadian dollar, the Doha oil summit this weekend and while there’s talk that key producers could
Early Signs Of A Bottom In Global Pessimism
Heading into today’s inflation data, the prospects of German 10-year government interest rates going negative had added to the heightened risk aversion in global markets. And we’ve been talking this week about how markets are set up for a positive surprise on the inflation front, which could further support the
Focus On Bank Earnings
More bank earnings are in the spotlight today, with the major indexes hovering flat ahead of the open after strong gains in the last few sessions. Market participants appear to like the bank results thus far not because they’re
FX: AU Labor Meh, But Aussie Takes Off
Market Drivers April 14, 2016 AUD Labor data mixed but it holds bid EZ CPI turns flay Nikkei 3.23% Dax 0.6% Oil $41/bbl Gold $1244/oz. Europe and Asia : AUD AU Labor 26K vs. 18K EUR CPI 0.0% vs. -0.2% North America : GBP BOE Minutes 7:00 CAD HPI 08:30 USD CPI 8:30 Australian dollar took off in early
Has the Fed Bankrupted the Nation?
Volcker, Greenspan, Bernanke and Yellen. Which one does not belong? Logic dictates that Volcker should have been odd man out. After all, there is no legendary “Volcker Put.” The towering monetarist made no bones about never being bound by the financial markets. The same can certainly not be said of his three
Have We Seen The Bottom In Oil Prices?
Just days ahead of the Doha meeting, oil is surging to 5 month highs as the U.S. rig count continues to fall. • Despite being synonymous with coal, West Virginia’s coal output pales in comparison to that of Wyoming. In 2014, West Virginia produced 70 million short tons of coal, a fraction of the nearly 400 million
Globalization is Dead; Long Live Globalization
Modern research suggests globalization is coming is coming to an end. The World Trade Organization estimates international volume trade will grow by just 2.8% this year, marking the fifth consecutive year of subpar growth. The unusual patterns in cross-border flow since the financial crisis have undermined
Stocks On Track
Stocks are on track for another strong open, with positive data out of China and the better than expected J.P. Morgan ( JPM ) report offsetting the soft Retail Sales report. Market participants likely see a silver lining in
Can the U.S. consumer continue to hold up the world?
Seven years into the recovery, a key driver of economic growth continues to demonstrate a frustrating conundrum Consumer spending remains respectable, providing a much needed pillar to the global economy, but it has consistently failed to accelerate out
Higher Inflation Lifts Sterling, Yen Stabilizes
There are three highlights to the foreign exchange market today. First, the yen is marginally softer. The yen’s strength this month has been the main development. After making a marginal new high yesterday, some semblance of stability emerged in North America yesterday, and this has carried over into today’s
Focus On Q1 Earnings Season
The major indexes are on track for a modestly positive open on the back of oil market gains, but the focus is shifting to the Q1 earnings season, which ramps up in the coming days. Many in the market
Events This Week Could Stoke Stock Recovery
Oil closed above $40 today. We haven’t seen sustained $40+ oil since November of last year. That’s a very positive sign for global financial market and economic stability. But further recovery is necessary to keep the energy sector intact and to remove the threat of “spillover fallout” for the global economy.
Q1 Earnings Season Starts
“Opening Day” for Q1 earnings season throws out the first pitch this afternoon when aluminum giant Alcoa ( AA ) reports following the closing bell. Estimate revisions have been coming down this quarter for Alcoa, and the consensus is
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