Central bankers have the unchaperoned power to create the greatest fortunes ever known to mankind at will and to invest that money wherever they want. With trillions of dollars at their disposal and trillions more whenever they want to conjure it into existence, what is to stop them from controlling the oil market just as they have stocks and bonds?
Following yesterday's Yen surge in the aftermath of the disappointing BOJ announcement, the pain for USDJPY long continued, with the key carry pair tumbling as low as 106, the lowest level since October 2014 before stabilizing around 107, and is now headed for its biggest weekly gain since 2008, which in turn has pushed the US dollar to to its lowest close in almost a year as signs of slowing growth in the U.S. dimmed prospects for a Federal Reserve interest-rate increase. As a result, global stocks fell and commodities extended gains in their best month since 2010.
- Trump, Clinton press closer to general election showdown (AP)
- Acela primaries: Winners, losers (Hill)
- Trump Says He's `Presumptive Nominee' as Clinton Wins Four (BBG)
- In the battle for Hollywood endorsements - and cash - Clinton rules (Reuters)
- U.S. Oil Rises Above $45 a Barrel for First Time Since November (BBG)
- Spin: Near-Zero Growth Happens Often in Slow-Motion U.S. Economy (BBG)
For those who thought that the world's biggest company losing over $40 billion in market cap in an instant on disappointing Apple earnings, would have been sufficient to put a dent in US equity futures, we have some disappointing news: with just over 7 hours until the FOMC reveals its April statement, futures are practically unchanged, even though the Nasdaq appears set for an early bruising in the aftermath of what is becoming a disturbing quarter for tech companies. Instead of tech leading, however, the upside has once again come from the energy complex where moments ago WTI rose above $45 a barrel for the first time since November after yesterday's unexpected 1.07 million barrel API inventory drawdown.
Exxon Mobil has been rate AAA by S&P since 1930 according to Bloomberg. Today that ended as the global crude explorer with sales that dwarf the economies of most nations was cut to AA+ (Outlook stable). Having been put on notice in February (negative watch), citing concern that credit measures would remain weak through 2018. XOM stock is sliding and weighing on The Dow (back below 18,000).
Futures are currently unchanged, but the E-mini was down as much as 12 points less than two hours earlier after the European open when this time it was up to the PBOC to intervene in global markets by pushing the Yuan higher (selling USDCNY via intermediary banks) sending global stocks sharply higher off session lows and leaving the S&P futures virtually unchanged. As Bloomberg reported, there has been increasing USD/CNY selling in afternoon session as Dollar Index edged lower. This is the PBOC entering the building and levitating stocks.
Corporate executives pay packages are performance-based. That is, pay if you do and pay if you don't perform.
- Global shares reach four-month high, forex hit by Singapore sting (Reuters)
- Dollar Rally Hits Commodities as Europe Halts Global Stock Gains (BBG)
- Currencies Across Asia Fall Sharply Against U.S. Dollar (WSJ)
- IEA expects limited impact from oil output freeze at Doha (Reuters)
- IEA Sees Oil Oversupply Almost Gone in Second Half on Shale Drop (BBG)
- BofA Profit Declines 13% on Trading Slump, Energy Reserves (BBG)
As our empire erodes, and overseas tyranny evolves into full moral meltdown at home, and the economy becomes a series of bubbles, the sociopaths in charge resort to more inventive and draconian measures. Trump is neither the solution nor the answer but more like another symptom. A long simmering effect of a longer lingering cause. The cause and effect of bad governance, of corruption without any consequences.
- Bad News Is Great News: Cautious Yellen drives world stocks near 2016 peaks (Reuters)
- Yellen Spurs Global Stock Rally as Oil Rebounds, Dollar Tumbles (BBG)
- Trump drops pledge to back Republican presidential nominee other than himself (Reuters)
- Second judge says Clinton email setup may have been in 'bad faith' (Reuters)
- Brussels Airport Remains Shut as Police Hunt Third Attacker (BBG)
At the end of the day, it was all about the dollar and the reason for this morning's stock surge around the globe, as we noted last night, is absurdly delightful: Yellen signaled "weakening world growth" and "less confidence in the renormalization process." In other words, the "bad news is good news" mantra is back front and center.
Just over three months after the authorities lifted the four-decade ban on crude oil exports, the U.S. has actually exported less this year than it did over the same period the year before, when the ban was still in place.
- Belgium hunts 'third man' after Islamic State bombings (Reuters)
- Number of Attackers, Key Details of Brussels Assaults Remain Unclear (WSJ)
- Surviving Paris attacks suspect wants to return to 'explain himself': lawyer (Reuters)
- Brussels Suicide Bomber Slipped Terror Net (WSJ)
- Dollar rise hits commodities as Fed talks of tightening (Reuters)
Here is the real question: will the Rockefellers divest of their full energy holdings, kept in blind, family, and various other (offshore of course - nobody wants to pay taxes, not even green liberals) unknown trusts, due to their disgust with the "morally reprehensible" company created by their ancestor? The answer: of course not.