Crude

Weak Chinese Trade Data Confirms Global Slowdown, Imports Tumble

While central banks continue to "print" liquidity, now at a pace of nearly $200 billion per month, they are unable to print trade, perhaps the single best indicator of deteriorating global economic conditions. The latest confirmation came overnight from China, which reported another batch of disappointing trade data including imports which have now declined for 21 straight months, while exports have fallen for 12 of 13 months.

S&P To Open At New Record High As Commodities Rise, China Trade Disappoints

The meltup continues with the S&P500 set to open at new all time highs as futures rise 0.2% overnight, with European, Asian stocks higher, as job data pushed MSCI Asia Pacific Index towards highest close since Aug. 2015. Germany, U.K. economic data seen positive, with dollar, oil rising, and gold declining. The MSCI All-Country World Index rose 0.4% and was headed for its highest close in almost a year.

The Warren Buffett Economy: How Central-Bank-Enabled Financialization Divided America

Needless to say, the above outlandish graph does not capture capitalism at work. Nor did the speculators who surfed upon this $45 trillion bubble harvest their monumental windfalls owing to investment genius. Instead, it is the perverted fruit of Bubble Finance, and there is no better illustration of this bubble surfer syndrome than the sainted Warren Buffett.

Why Oil Under $40 Will Bring It All Down Again: That's Where SWFs Resume Liquidating

If oil were to drop back under $40, not only would it precipitate even more selling of oil as momentum strategies flip, but it would catalyze a liquidation by those SWFs who thought they were done selling equities, leading to a return of the same sellers that pushed the S&P back to the low 1,900s a short 6 months ago. So for all those curious where stocks are going next, the simple answer is: keep an eye on what oil does next.

Oil Bounce Fades After 6th Weekly Rig Count Rise In A Row

Having ripped off the algo-run-seeking $39 handle lows after DOE data, WTI broke $42 this morning on payrolls before fading back into the rig count data. For the 9th week of the last 10, US Oil rig counts increased (+7 to 381).

Futures, Global Stocks Rise As Oil, USDJPY Drops: All Eyes On The Jobs Report

With all eyes on today's jobs report, where consensus expects a 180K payrolls gain, European, Asian stocks and S&P futures all rise amid a surge in government debt as markets digest the BOE's "kitchen sink" easing for a second day. But please don't overthink it. In deja vu fashion, Bloomberg summarizes the action simply as "stocks rose around the world on speculation central bank stimulus measures will support the global economy." We've heard that just a few times before.

Why Is High-Yield Energy Debt Decoupling From Oil?

Various analysts believe that the close correlation between the junk bonds and crude oil - which have been together for quite some time - has now decoupled. Is this relationship really over, or is this parting of ways only a temporary separation?

How Moving Gasoline Tankers From New York To Florida Fooled Oil-Trading Algos

A 330,000-barrel tanker usually on the Houston-to-Jacksonville, Florida, run last month moved two products cargoes to Florida from New York Harbor, according to vessel tracking data compiled by Bloomberg. Since June, at least eight foreign import cargoes originally booked to supply New York were sent instead to the U.S. Gulf Coast and Mexican West Coast.

Deja-Vu(lnerable): Oil Spikes 6% On Contango-Crush As "Violent Reversal" Higher Looms

WTI Crude is up over 6% in 24 hours, since yesterday's surprise build (and production cut) as the machines squeeze out an over-exuberant short positioning once again. However, just as we saw last year around this time, Astenbach's infamous oil veteran Andy Hall is warning a "violent reversal higher" looms again amid extreme positioning and potentially improving fundamentals. Exaggerating the move further is the surge in the contango which has once again made sea-storage profitable, sending yield-seeking traders into the carry trade (and squeezing shorts further).

Frontrunning: August 4

  • Bank of England cuts rates for first time since 2009, restarts bond purchases (Reuters)
  • Obama administration denies Iran cash payment was a ransom (Reuters)
  • Mike Pence Endorses Paul Ryan After Donald Trump’s Refusal (WSJ)
  • In slap at Trump, some wealthy Republicans campaign for Clinton (Reuters)
  • Clinton leads Trump by 17 points in NH (The Hill)

S&P Futures Flat As Europe, Asia Lifted By Banks, Yen; All Eyes On The Bank Of England

In a mostly quiet session, European and Asian stocks rose, pushed higher by financial stocks and the USDJPY which initially dipped on some hawkish comments by BOJ deputy governor Iwata, only to rebound later in the session, lifting the Nikkei 1.1%, while the Stoxx 600 rose 0.4% led higher by the banking sector. S&P futures are unchnaged after yesterday's last hour ramp. The key event is the BOE decision due in half an hour.