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WTF Chart Of The Day: Energy Stocks Edition
It appears that not only did Janet Yellen's soothing words from last week decouple the broad US equity market from any fears about oil prices, but energy stocks themselves now have absolutely no relationship with the underlying raw material that drives their business (and it's not like the Contango provides much support). Now where have we seen this before?
As oil prices plumb the week's lows, energy stocks continue their short-squeeze rebound dead-cat-bounce idiocy - because the market's always right and 'knows' the future (just like in 2000 and 2007 and twice in November and already in December)
Fear of missing out conquers all...
Chart: Bloomberg
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Because nothing says profits like $54 oil
Its easier to have big profit margins when raw material prices are sinking....
So you think the oil majors' costs are going down faster than revenues? I cannot say I have seen an article claiming that, although maybe it's just a matter of time.
THe Majors, Big Banks and Big Gubberment always win... Until somebody takes the ball away from them. You feel lucky punk?
Bad for the majors in the short term but good in the long term. They will have less competition when prices rise and they can scoop up assets on the cheap.
Not when the industry is based on $100 oil... How long do you think the spice will flow when production costs exceed price? Much like PM's, it's all an illusion...
It's all a shale game
We shaled some folks...
Let me know when the banks own every stock, bond, commodity, politician and real estate of any value. Oh, wait...
LAST WEEK I FOUND 2 ADULT FRIENDS WHO DID NOT KNOW (HAD NOT HEARD OF) LEHMAN BROS.
Yet their opinion counts......
Morgan Stanley will be next...
"The MArket is Always Right". In the year 2014 we can't speak of the stock exchanges as markets. They are devoid of price discovery, as the oil stocks prove! No price discovery because of manipulation via several different conduits. The Fed openly manipulates and big trading houses and banks trade the Fed manipulation via inside information and computer trading HFT. Where is the mechanism for price discovery when the Fed stands between economic fundamentals of the Oil stocks [debt, oil prices, cost of production, taxes, competition]. The Fed factors out most of the price signals.
What you have is everyone using Fed liquidity at ZIRP to try and trade the Fed using computers. Where in is the market in that?
The Market is a machine designed to transfer newly printed wealth in the hands of banks, trading houses and the 1%, this is the much hyped "Wealth Effect" meant to stimulate the real economy.
I like the 6 pack-, Miley Cyrus seethrough pube and cellulite ads - they suddenly mutated to evade the Mercury adblocker!
Why is it the ZHers only see price discovery when proces are going down and not up? Why the drop in oil is from demand and not manipulation?
Which energy stocks? The majors will likely benefit from the carnage in the small-cap sector over the long term, hence they should outperform oil.
I think you are quite right. Starting in June 2013 through June 2014, profits at the Integrated petroleum producers were negative year over by large margins.
The last two quarters, hoever, have seen gains of 18% and 32% year over year.
Of the 17 companies in the sector, 10 had higher earnings per share, 1 was the same, and six had lower, for their most recent quarter.
One year ago, the numbers were 3 up 0 the same, and 11 down.
some more non-fed. liquidity, geting solidified, you can here yellen in the back ground, drag those suckers away, shooter, shooter, shooter, we need a new shooter, step up grab and the dice.
Bad news is good news, forget that at your own peril in the land of Ponzi OZ.
Umm....... reality check here for those who want to make money wisely...... OAS crashed from $58 to $10 in just a few months, WLL from $92 to $24, KOG from $16 to $5, HAL from 74 to 38... with absolutely no short covering rallies more than 2 days. .. s straight fucking drop and then when they hit their lows they bounced back 50% and remain there but are still down HUGE. What do you expect man, stocks to just go to fucking zero just like that? Some might get bought out so there is reason or hope they are significantly lower than where any bid would take place. OAS is just over 1 billion cap. It's either going to zero, bought out, or just remains here for awhile until oil rises back up.