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Tag Archives: United States

Economic Data in the Holiday-Shortened Week

The capital markets will turn increasingly quiet in the week ahead as the Christmas holiday thins participation.  If this is the season of goodwill, investors are lapping it up.  Global equity markets are finishing a strong year on a high note.  Record highs were recorded in the S&P 500 and the Dow Jones Stoxx 600.  The MSCI Emerging Markets equity index is at its best level since August 2018.  Risk assets are doing well, while interest rates have backed up.  The CRB Index of...

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Is The Negativity Overdone?

Give stimulus a chance, that’s the theme being set up for this week. After relentless buying across global bond markets distorting curves, upsetting politicians and the public alike, central bankers have responded en masse. There were more rate cuts around the world in August than there had been at any point since 2009. And there’s more to come. As Bloomberg reported late last week: Over the next 12 months, interest-rate swap markets have priced in around 58 more rate cuts, assuming central...

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The Global Squeeze; US, Canada, China

Ever since the first major outbreaks of Euro$ #4 last year, the balance of data has tipped further and further toward the minuses. Yesterday was a big one. US income growth in 2019 is no longer growth. Not huge declines, but minus signs where, if the prior boom narrative had been valid, large plus signs should rule unchallenged. The business cycle used to be relatively easy and intuitive. A recession shows up, the economy quickly, violently plunges, and then just as fast back to normal. The...

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The Green Shoots of Spring

Investors have worked themselves into a lather. Equities crashed in Q4 last year amid on corporate earnings and concerns about growth. The Fed’s tightening decision in December was made unanimously.  The above-trend growth, the preferred inflation measure was near target, unemployment was the lowest in a generation and real rates were historically low.   There are myths in the market, like the Plunge Protection Committee, or that the Fed targets the core rate of...

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Little Resolution in the Week Ahead

According to legend, the person who unraveled the Gordian Knot would rule the world.  No one succeeded until Alexandar the Great took his mighty sword and sliced the knot in half.  A young boy saw him afterward, crying on the steps of the Temple of Apollo.  "Why are you crying?" the boy asked, "You just conquered the world.  "Yes'" Alexander wept, "Now there is nothing else for me to do."  Investors are not as cursed as Alexander the Great.  But what challenges investors...

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Insight: US natural gas, coal markets calm about low inventories … for now

The growth of low-priced natural gas supply from Appalachia and Texas appears to be changing the market calculus on winter heating demand this year. With pre-winter gas inventories sitting at their lowest levels in over a decade, prices remain near historic lows. In the coal market, inventories are also at their lowest level in more than a decade, but prices have shown little reaction. For both commodities, an early or colder than normal winter could have a significant impact on pricing....

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Insight from Washington: The SPR rumor is dead, long live the SPR rumor

When Saudi Arabia, Russia and other oil producing countries decided against a broad increase in crude output in Algiers last month, chatter began that the US was mulling a release from its government-owned oil stocks. When the Algiers meeting wrapped up, Saudi energy minister Khalid al-Falih told reporters that the market was balanced and that OPEC had adequately boosted supply, assurances which did little for US President Donald Trump, who took to a full audience at the United Nations to...

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US utility coal stockpiles continue to decline; markets not alarmed

Utility coal stockpiles stood at 128.4 million st at the end of May, according to the most recent US Energy Information Administration data, released last week. The figure was down 20.9% from the year-ago month, and down 23.7% from the five-year average for the month. Stockpiles typically build during May, as utilities prepare for summer burn. The five-year average is a build of 3.1 million st; this year, it was a drawdown of 540,000 st. According to Arlington, Virginia-based energy...

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Exit the Dragon? New steel tariff could divert Chinese steel back to Asia

With new steel tariffs imposed by the US, Chinese and ASEAN steel is becoming more expensive in the US. While China contributes only 2% of finished steel entering the US, Chinese items made from steel and aluminium – along with countless “transiting metals” – are likely to take a far greater share. In fact, China was the second-largest source of imports of steel and aluminum products into the US in 2017, second to Canada but above Mexico. Should a strong uptick in US domestic...

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Vanity Fair Editors Relentlessly Attacked Over “Don’t-Run-Again-Hillary” Satirical Video

It appears the McResistance is on the warpath once again, and this time they're going after Vanity Fair, which to the surprise of many published a satirical video about Hillary Clinton's future prospects in the days just before Christmas with the caption, "Maybe it's time for Hillary Clinton to take up a new hobby in 2018" as part of a broader series on New Year's resolutions.  "Take up a new hobby in the new year," suggested Vanity Fair writer Maya...

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