Update on Oil: Apr 6, 2020

Many seasoned investors are surprised to see how positively correlated stock returns have been to oil prices. Energy stocks make up 8% of the overall market, so you’d expect them to have some influence. But, thanks to the increasing prominence of algorithms and quantitative trading, the impact has grown well beyond what 8% should contribute … continue reading →

Update on DJIA: Mar 18, 2020

In our last dedicated update on the Dow [see: July 2019 Update], we noted the intersection of a number of overhead resistance features in its chart and offered some thoughts on its downside potential if it managed to reverse. Note that our 18974 target represents a backtest of the red channel from which DJIA broke … continue reading →

COVID-19: What to Expect

Updates are in reverse order, meaning the latest update is just below.   UPDATE:  June 24, 2020 Presented without comment…charts highlighting when each state below “re-opened.”   UPDATE:  June 17, 2020 On March 12, our local school district closed its doors after a fifth presumed case of coronavirus was detected in our Boston suburb of … continue reading →

Who’s Propping up the Stock Market?

It was October 1989 and the stock market was in trouble. Two years after crashing 36% (including 20% in a single session) the S&P 500 had made a comeback and had climbed back to new all-time highs. But high inflation, slipping junk bond prices and failing S&Ls were in the headlines daily. On October 13, … continue reading →

Middle East Tensions Escalate

Not too surprisingly, the Iran problem didn’t go away over the weekend.  If anything, both sides are making threats that would significantly expand the conflict. What’s more, Trump’s unilateral actions have resulted in Iraq’s parliament calling for all US troops to withdraw from Iraq – without question an important win for Iran. Trump’s 2011 predictions … continue reading →

Oil Spikes on Iran War Worries

WTI futures spiked nearly 5% overnight in the wake of a US drone strike on Baghdad Airport which killed Iranian military commander Qasem Soleimani.  It is a dangerous escalation in the US conflict with Iran which broadened when Trump alarmed US allies by pulling out of the Iran nuclear deal last May. We argued at … continue reading →

CPI: Nov 13, 2019

Today is off to an interesting start.  Following Trump’s call for negative interest rates and more grandstanding on China in New York yesterday, headline CPI came in hotter than expected but right in line with our forecast. As we’ve discussed, this is the result of oil and gas trending sideways in support of the upcoming … continue reading →

Unspinnable

An extremely disappointing payrolls report put February new hires at 20K.  I had to look twice, certain that a digit had been left out.To make matters worse, hourly earnings spiked 3.4% YoY, far in excess of what all the Goldilocks models suggested. It should be entertaining to see how Kudlow et al. spin this one. … continue reading →

The True Price of Oil

As enjoyable as it is filling up the Family Truckster for only $2.36/gallon, what if it meant the the death of thousands of Kurds?  Here’s what we know. For months, OPEC ignored Trump’s demands to bring down the price of oil.  Trump was correctly concerned that spiking oil prices would push inflation to new highs … continue reading →

Coincidences and Consequences

It’s interesting how Khashoggi’s murder top-ticked oil and gas prices… …and, so soon after Trump’s latest demand that OPEC lower oil prices. I’m certainly not insinuating that Trump had anything to do with Khashoggi’s murder. But, OPEC ignored Trump’s Sep 20 demand.  Two weeks later, oil prices had spiked 10% higher.  Since Oct 3, the … continue reading →