Shale predictions and price predictions, sometimes they just do not get it. According to an article in today's Financial Times, OPEC is shocked by how many hedge funds really have no clue about how the oil market works. OPEC’s Secretary General Mohammad Barkindo, who met with hedge fund managers, seemed shocked that many of them had no "basic understanding" of oil and were less savvy than was widely assumed.
U.S. equity markets are on course to open relatively unchanged at the start of the week after bouncing back from early losses on Friday, which came as Donald Trump announced tariffs on steel and aluminum.
A potential trade war and Russian meddling, not in an election but to try to influence U.S. energy policies, is all the rage in the financial markets today. U.S. stocks plummeted after President Donald Trump slowed the market with the timing of his announcement that he would impose a 25% tariff on steel imports and 10% on aluminum.
You can’t say I didn’t warn you. A week ago, markets, especially the Dow, hit 610 days from the August 2015 bottom. Most market participants are not aware of it unless they read me or a small handful of other market cycle experts. The challenge I’ve had is the bigger time windows from last September and October didn’t seem to fire off as usual. It was the first time in 19 years an important window didn’t seem to fire off.
U.S. equity markets posted their biggest one-day loss since August 2017 with the Dow dropping 362 points and the S&P 500 losing 31.10, both over the 1% mark. The fall came just hours before the President gave his State of the Union speech on Capitol Hill and hailed the strength of the U.S. economy, the strength of the stock market and the continued trend of job creation.
War is over if you want it to be, President Donald Trump said in his State of the Union address on Jan. 30, where he once again declared, “We have ended the war on American Energy and we have ended the war on beautiful clean coal. We are now an exporter of energy to the world, as well as stating that the era of U.S. economics surrender is over.”
Markets got hit yesterday (Monday) and I haven’t seen that many experts try to explain it. How many realize last Thursday was 610 trading days from the August 2015 low? I saw that, Friday was another good market day and I said under my breathe, “here we go again.” But something happened between then and now. Monday was the first day I’ve seen in recent memory where my 1-minute YM charts had a hard time going up. It’s about time.
Trump is widely expected to push his America first agenda while making the argument for fair and reciprocal trade and claiming the country is now open for business. The visit is clearly an attempt to pitch the country to business leaders following the recent tax overhaul while at the same time reaffirming the United States’ position in the world and even perhaps clearing up some of the damage caused by recent unsavory leaks.
For months, we have obsessed over the strength of equity markets and the continuous daily record highs. However, now the other side of the story is starting to gain traction, the decline of the U.S. dollar. It’s becoming just as much a hallmark of the Trump presidency as the equity market rally.
We began last week by wishing everyone the obligatory Happy New Year. And as it turned out, it has already been very happy for the U.S. equities bulls. This is also true for their international counterparts, even if politically challenged Germany is lagging a bit.