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Oil and Puppeteers

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        by Larry Levin Oil? Uhh, is there a problem in the markets out there that has to do with oil? No – couldn't be. Oh wait, there “was,” as in past tense...in other words, three whole days later there's no problems now. Good times...good times. There must have been insanely good, and new, fundamental news that hit the tape because the market RACED so much higher that even the perma-bulls on Fraud Street were shocked. Clearly the oil problem is gone – right? Let's have a look at the recent news. • Oil prices plummeted ~7% from its intra-day … [Read more...]

Rubles

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          by Larry Levin Right now you need a lot of rubles to buy most things, except of course for a barrel of crude. Overnight, the ruble sank as much as 19 percent to 80.10, before trading at 78 at 3:14 p.m. in Moscow. That was the biggest drop since 1998, the year Russia defaulted on its local debt. The currency erased a gain of 11 percent as investors shrugged off a surprise Bank of Russia decision to take its key interest rate to 17 percent from 10.5 percent. Ten-year government-bond yields jumped 317 basis points to a record 16.4 … [Read more...]

Crude Oil

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          by Larry Levin   The main topic of last week's market action was certainly the collapsing crude oil prices. And although everyone's initial reaction to lower oil prices is that it will be good for the economy and therefore the market, we're finding out that when the whole sector has been financialized, it can drag stocks lower. This worry will surely be at the top of the list this coming week as well. In fact, if the following news turns out to be correct, it could get a lot worse. OPEC says it could oil prices to fall to $40 per … [Read more...]

Stocks Trying to Rebound From Last Week’s Drop

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The domestic equity markets are trading higher in early action, despite a disappointing read on U.S. regional manufacturing activity, rebounding from last week's drops for the Dow and S&P 500 that were the largest weekly declines in multiple years. Crude oil prices, which have fallen as of late to more than five-year lows to foster the sell-off in the global equity markets, are recovering modestly to help buoy sentiment. Meanwhile, stocks are showing some resiliency in the face of a hostage situation in Sydney, Australia and a disappointing read on Japanese manufacturing sentiment. … [Read more...]

China

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        by Larry Levin   Let us not forget about China. They are in fact now the world’s largest economy, officially surpassing the U.S. according to new data from the International Monetary Fund. The IMF says China will produce $17.6 trillion this year, ahead of the $17.4 trillion made by the U.S. This is the first time since Ulysses S. Grant was president that we are number two. But just like the domestic economic situation here at home, being number one doesn’t mean things are robust and rosy for the Chinese economy. The Chinese stock … [Read more...]

Central Bank Santa

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        by Larry Levin   Is it any surprise oil prices are cratering? With global GDP expectations plumbing cycle lows, JPMorgan confirmed the global slowdown is accelerating as their Global Manufacturing PMI printed 51.8 - its slowest level of 'expansion' since September 2013.New Orders fell to the lowest reading since July 2013 and New Export Orders to the lowest since June 2013. But this was “spun” to be positive, because hey, gas is cheap! And there’s more bad news/good news scenarios where that came from. From Zero Hedge Prepare … [Read more...]

PMI

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      by Larry Levin PMI data is released once per month and the next date is Monday, December 1st. PMI stands for the Purchasing Managers Index that is a monthly survey of certain companies, which provide an advanced indication of what is happening in the private sector of the country. All advanced economies report this index and it is one of the more important data points. U.S. PMI data are expected Monday morning and have a consensus reading of 55.0. A pre-estimate is called the “Flash PMI,” which came out earlier in November and surprised economists with a … [Read more...]

Turkey Wars

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      by Larry Levin   I wrote this last Thanksgiving but not only is it still relevant, it is still going on. NO resolution, NO overhaul. Are we surprised? From 2013: The turkeys are squabbling....the big turkeys that is. This Thanksgiving battle is not pilgrims versus Indians, but the big banks suing the regulators. JPMorgan Chase, Goldman Sachs and their other compadres are fuming over far-reaching new rules passed in the wake of the financial crisis. So guess what, they plan to haul the Commodity Futures Trading Commission to court. The banks, … [Read more...]

Chuck

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      by Larry Levin     I read an interesting op-ed that ran in the Wall Street Journal from Charles Schwab. I found it intriguing to read a Wall Street veteran that didn't sound like one of the high-priests of the Keynesian religion of economics. I hope you enjoy it too. For America’s 44 million senior citizens, plus tens of millions of others who are on the threshold of retirement, last month marked a watershed moment that is worth celebrating. At the end of October, the Federal Reserve announced the first step in returning to a more normal … [Read more...]

Muppets

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      by Larry Levin   Yes, I have written about Goldman before but it's hard to ignore these stories. From Zero Hedge: If only the $3.2 billion Goldman Sachs Global Opportunities hedge fund had listened to the firm's equity strategists, life would have been great. However, as Bloomberg reports, the so-called 'best-ideas' fund dropped 5.6% in October leaving it down 2.6% for 2014 as interest-rate bets went pear-shaped amid the crash-and-dash that was October's market manipulation. "We believe monetary policy needs to catch up with growth, and that … [Read more...]