Standing Headline: Fed Talks,Chinese Economic Data Pummel Stocks,Crude

Posted by Kelly Burke on Sep 28, 2015 3:46:53 PM

Man grasping his head looking at computer screens

WTI dropped 2.8% today to close out at $44.43 a barrel, while Brent closed out down 2.5% . On the refined products side of the NYMEX, ULSD and Gas both took a pummeling as well, with both down over 4 on the day. To be exact, ULSD closed out down (-.0453) to 1.4772 and RBOB closed down (-.0471) to 1.3488.

So whats going on?

For one, the news from China today was that industrial companies there have seen profits plummet at a faster level than they have in four years, resparking speculation that China's economy is really struggling a lot more than everyone has been assuming. As previously discussed, Chinese economic data is such a huge indicator because they are a top commodities consumer, and strong economic data from China is basically what traders and analysts are "hanging their hat on" as a potential for growing demand to stave off the price crushing effects of the oil glut.

The IMF Managing Director also announced today that although the economy was still recovering from the recession, the pace had decelerated, and the 3.3-3.8 GDP goals for 2015 & 2016 were now "unrealistic". This in combo with the bleak Chinese data pushed crude down quickly both overseas and domestically. 

In related news, Shell announced today that they will be pulling out of Arctic drilling exploration in Alaska. This is primarily a result of the sustained drop in oil prices, and follows a growing trend industry-wide. Over half of American rigs have been decomissioned, and investment into new oil sands projects and new gulf drilling projects has dropped substantially.

Simply put, theres just too much oil out there now to invest huge sums of money into procuring even more of it.  

Wall Street took a beating today as well on Chinese data, the IMF remarks, and continued rumor milling over the timing of the Fed Rate hike. The president of the NY Fed suggested it could happen as soon as October, where others have speculated December was the likely target date. So once again, Fed talks and the resultant speculation, combined with some more "surprise" bleak economic data hammered stocks today - which is starting to seem like a standing headline at this point. 

Stay Tuned!

 

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Topics: CRUDE, FED rates, economic data, stock market, IMF, brent, wti, china, fed

Greece Nears Default, Sends Global Stocks & Commodity Prices Reeling

Posted by Kelly Burke on Jun 29, 2015 2:52:50 PM

Sillouettes of people infront of charts showing Greek Debt

Stock Markets across the Globe dropped sharply on worries over Greece's potential (and frankly, very likely) default. Greece owes the IMF  a 1.8 billion dollar payment tommorow, but their Prime Minister has pushed voting on whether to accept referendums to July 5th, making it pretty clear Greece is unwilling and unable to make their required payments. 

European stocks dropped on fear that Greece will vote to leave the European Union rather than work with creditors and the European Central Bank to structure repayment obligations. If Greece leaves the union it could impact the Euro currency and that uncertainty will probably continue to impact the market on some level until we see how it all plays out. 

Greek banks and markets are closed this week, after a rush on banks and ATMs nationwide sparked fears of the system collapsing under the weight of citizens pulling all their money out simultaneously. This morning the Greek stock market was down over 15% despite not even being open. 

Closer to home, the Governor of Puerto Rico has announced it is "simply not possible" for the province to pay its required obligations. They owe 94 million by July 15, with another 140 million due by August 1 on bond principal. 

This weekend also saw three seperate terrorist attacks in 3 seperate countries, all of which ISIS claimed responsibility for. 

Needless to say, things are not looking good globally, both in terms of safety and economics. 

In terms of commodities, Greece seems to be the focus, while terrorism attacks are being ignored as evidenced by the across the board drops we are seeing. WTI and Brent Crude were both down over 2% in this mornings trading. ULSD and RBOB front month are both trending down today, with ULSD closing out at 1.8366 (-.0262) and RBOB settling at 2.0303 (-.0182) 

Stay Tuned!

 

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Topics: Greece, Euro Debt Zone, ISIS, IMF

IMF News, Germany, and the Dollar Pushing Markets Down

Posted by Kelly Burke on Oct 7, 2014 12:24:05 PM

Magnifying class showing the Internation Monetary Fund logo

The International Monetary Fund (IMF) announced this morning it was downgrading its outlook for Global growth in the wake of disappointing growth in the Euro Zone and Japan. This is the third time this year the IMF has revised its outlook down (this time to 3.3% from 3.8%) and out of the last twelve forecasts in the past 3 years, they've revised 9 of the estimates down. According to Fox News, the IMF consistently has based projections off of an assumption that wealthier nations would be able to reverse their high debt, high unemployment environments a lot faster than they have been.

The IMF's gloomy outlook on the Euro Zone and bleak projections for growth potential in emerging markets has been another force behind the rally of the US dollar, as the US economy has started to stabilize versus other major nations, especially France and Germany. Germany hit a record 5 year low on industrial production, not good considering they are one of the critical economic players in the zone. 

The news from the IMF pushed US stocks down at the open this morning, understandably. A related factor in the downwward push was the IMF warned that increased interest rates by the US Fed could stall progress in the US - and since essentially they are reporting that the US and Britain are holding everything afloat outlook wise - thats really not good economic news for anyone. 

Commodities are pushing down today, with Germany's abysmal output pushing the dollar higher. The stronger the dollar, the higher relative cost to non-dollar currency becomes, which would push demand even lower in Europe, especially in tandem with a slower economy overall. 

This week will see reports out from the US Energy Information Agency (EIA), the Organization of Petroleum Exporting Countries (OPEC), and the International Energy Agency (IEA) -- all of whom are expected to project lower demand as well. 

As of noon, CRUDE is trending down -.97, ULSD is down -.025 and RBOB is down -.0404 with all looking like the trend will continue throughout the afternoon. 

Stay tuned!

 

 

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Topics: Commodities, European Economy, CRUDE falls, Dollar Strengthens, IMF

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