Better Than a Hot Death Sandwich
After I recommended a bearish position in RCE on Friday, the markets surged like a rhino on cocaine. Typical! Still, it's better than a hot-death sandwich, if only because A) we kept the position small and B) my other services, which are longer-term, retain their bullish stance on gold, energy and agriculture.
And the markets are looking to open well up this morning, but Friday showed us how quickly these things can turn around. Keep an eye on the dollar ...
It seems to be heading lower. If the US dollar breaks below 84.5, it could go to 82.65 or stronger support at 81. A weaker dollar should be supportive of gold (it has been so far this morning -- gold is up by about $24 as I write this) but it doesn't have to be.
Here is the news I'm reading ...
GLOBAL MARKETS
World markets surge on global stimulus hopes
The gains came despite Friday's news that American employers cut 533,000 jobs in November -- the most in 34 years -- as investors appeared to signal their support for growth-promoting measures around the world. "The hour is darkest before the dawn and while the economic backdrop is absolutely dire, policy makers have now moved to an aggressively accommodative stance," said Jeremy Batstone-Carr, head of research at Charles Stanley in London. Chinese officials were reportedly meeting this week to discuss possible new steps to expand the $586 billion of stimulus already planned, while in Washington, a bailout of ailing U.S. automakers appeared to be falling into place.
Wall Street Looks for Upbeat Open
Wall Street was set for an upbeat start on Monday, with investors enthusiastic that President-elect Barack Obama's plan to launch the largest infrastructure-spending package since the 1950s will help boost the crippled economy. Obama announced over the weekend plans for the largest U.S. public works spending program since the creation of the interstate highway system a half-century ago. That could bolster the economy by putting thousands of people to work building schools and other construction projects.
Cheapest Stocks Since 1995 Show Companies' Cash Exceeds Total Market Value Stocks have fallen so far that 2,267 companies around the globe are offering profits to investors for free. That’s eight times as many as at the end of the last bear market, when the shares rose 115 percent over the next year.
US ECONOMY
Fears of a Million Layoffs a Month in Corporate America
As many as a million American jobs could be lost every month by next spring as businesses struggle to raise capital in financial markets consumed by fear, according to a new analysis. Graham Turner, of consultancy GFC Economics, says the rising cost of corporate debt is now flashing a red warning signal that far worse is to come over the next few months and job losses are heading for levels last seen in the 1930s Great Depression.
Financial Medicine of Lower Interest Rates Will Only Make Us All Sicker
The problem isn't the cost of credit but the availability. Credit won't become more available until the banks trust each other and the inter-bank market reboots. That won't happen until the banks are forced to reveal their potential sub-prime losses. Lower rates just delay that "day of reckoning" – by giving the banks more hope they can get away without "full disclosure".
ENERGY
Contango Pays Most in Decade as Shell Stores Crude Stockpiling crude may provide higher returns than commodities, stocks and Treasuries as the U.S., Japan and Europe endure simultaneous recessions for the first time since World War II. As many as 16 [supertankers are] booked for potential storage instead of transporting crude ... The tankers, if full, hold about 26 million barrels worth about $1 billion, more than the 22.9 million barrels sitting in Cushing, Oklahoma, where oil is stored for delivery against Nymex contracts.
Oil Price Could Fall to $25 a Barrel, Analysts Say
Merrill Lynch commodity strategist Francisco Clanch said there is possibility it could go even lower if the economic outlook worsens. "Potentially, under a number of circumstances including a recession in China and a failure from OPEC to cut enough output, we could see prices dipping all the way to $US25 a barrel," he said. "We're not forecasting that. We're saying its might happen."
SOLAR
Will Solar Power Ever Be as Cheap as Coal
“Solar power is the energy of the future – and always will be." That tired joke, which has dogged solar-generated electricity for decades due to its high cost, could be retired far sooner than many think. While solar contributes less than 1 percent of the energy generated in the United States today, its costs are turning sharply downward.
How Will Temporary Decline in Oil Prices Impact Energy Sector?
Many observers have suggested that a precipitous decline in the oil markets will have a disastrous impact on alternative energy investments. I disagree because I believe reversion to the established trend line in the oil markets can only take us back to the $70 to $80 level and many alternative energy technologies remain cost effective at that price point. Moreover, electricity prices are not likely to experience the same violent swings as oil. So the fundamental market drivers that favor the use of wind and solar power are different. Sales may decline for a time, but they will almost certainly recover with the overall economy.
METALS
Gold Gains in London as Weaker Dollar, Higher Oil Boost Demand for Metal Gold rose for the first time in four days in London as a weaker dollar and higher oil prices increased its appeal as an alternative investment to the U.S. currency and hedge against inflation. Silver and platinum also gained.
Copper Gains in London, Ending Worst Losing Streak in a Decade; Zinc Rises Copper rallied from its worst losing streak in a decade in London, buoyed by a weaker dollar and U.S. President-elect Barack Obama’s pledge to begin the biggest public works program in about 50 years. Aluminum and zinc also advanced.
And the markets are looking to open well up this morning, but Friday showed us how quickly these things can turn around. Keep an eye on the dollar ...
It seems to be heading lower. If the US dollar breaks below 84.5, it could go to 82.65 or stronger support at 81. A weaker dollar should be supportive of gold (it has been so far this morning -- gold is up by about $24 as I write this) but it doesn't have to be.
Here is the news I'm reading ...GLOBAL MARKETS
World markets surge on global stimulus hopes
The gains came despite Friday's news that American employers cut 533,000 jobs in November -- the most in 34 years -- as investors appeared to signal their support for growth-promoting measures around the world. "The hour is darkest before the dawn and while the economic backdrop is absolutely dire, policy makers have now moved to an aggressively accommodative stance," said Jeremy Batstone-Carr, head of research at Charles Stanley in London. Chinese officials were reportedly meeting this week to discuss possible new steps to expand the $586 billion of stimulus already planned, while in Washington, a bailout of ailing U.S. automakers appeared to be falling into place.
Wall Street Looks for Upbeat Open
Wall Street was set for an upbeat start on Monday, with investors enthusiastic that President-elect Barack Obama's plan to launch the largest infrastructure-spending package since the 1950s will help boost the crippled economy. Obama announced over the weekend plans for the largest U.S. public works spending program since the creation of the interstate highway system a half-century ago. That could bolster the economy by putting thousands of people to work building schools and other construction projects.
Cheapest Stocks Since 1995 Show Companies' Cash Exceeds Total Market Value Stocks have fallen so far that 2,267 companies around the globe are offering profits to investors for free. That’s eight times as many as at the end of the last bear market, when the shares rose 115 percent over the next year.
US ECONOMY
Fears of a Million Layoffs a Month in Corporate America
As many as a million American jobs could be lost every month by next spring as businesses struggle to raise capital in financial markets consumed by fear, according to a new analysis. Graham Turner, of consultancy GFC Economics, says the rising cost of corporate debt is now flashing a red warning signal that far worse is to come over the next few months and job losses are heading for levels last seen in the 1930s Great Depression.
Financial Medicine of Lower Interest Rates Will Only Make Us All Sicker
The problem isn't the cost of credit but the availability. Credit won't become more available until the banks trust each other and the inter-bank market reboots. That won't happen until the banks are forced to reveal their potential sub-prime losses. Lower rates just delay that "day of reckoning" – by giving the banks more hope they can get away without "full disclosure".
ENERGY
Contango Pays Most in Decade as Shell Stores Crude Stockpiling crude may provide higher returns than commodities, stocks and Treasuries as the U.S., Japan and Europe endure simultaneous recessions for the first time since World War II. As many as 16 [supertankers are] booked for potential storage instead of transporting crude ... The tankers, if full, hold about 26 million barrels worth about $1 billion, more than the 22.9 million barrels sitting in Cushing, Oklahoma, where oil is stored for delivery against Nymex contracts.
Oil Price Could Fall to $25 a Barrel, Analysts Say
Merrill Lynch commodity strategist Francisco Clanch said there is possibility it could go even lower if the economic outlook worsens. "Potentially, under a number of circumstances including a recession in China and a failure from OPEC to cut enough output, we could see prices dipping all the way to $US25 a barrel," he said. "We're not forecasting that. We're saying its might happen."
SOLAR
Will Solar Power Ever Be as Cheap as Coal
“Solar power is the energy of the future – and always will be." That tired joke, which has dogged solar-generated electricity for decades due to its high cost, could be retired far sooner than many think. While solar contributes less than 1 percent of the energy generated in the United States today, its costs are turning sharply downward.
How Will Temporary Decline in Oil Prices Impact Energy Sector?
Many observers have suggested that a precipitous decline in the oil markets will have a disastrous impact on alternative energy investments. I disagree because I believe reversion to the established trend line in the oil markets can only take us back to the $70 to $80 level and many alternative energy technologies remain cost effective at that price point. Moreover, electricity prices are not likely to experience the same violent swings as oil. So the fundamental market drivers that favor the use of wind and solar power are different. Sales may decline for a time, but they will almost certainly recover with the overall economy.
METALS
Gold Gains in London as Weaker Dollar, Higher Oil Boost Demand for Metal Gold rose for the first time in four days in London as a weaker dollar and higher oil prices increased its appeal as an alternative investment to the U.S. currency and hedge against inflation. Silver and platinum also gained.
Copper Gains in London, Ending Worst Losing Streak in a Decade; Zinc Rises Copper rallied from its worst losing streak in a decade in London, buoyed by a weaker dollar and U.S. President-elect Barack Obama’s pledge to begin the biggest public works program in about 50 years. Aluminum and zinc also advanced.
Labels: crude oil, gold, solar power, US dollar, US economy
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posted by Sean Brodrick @ 4:43 AM
