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Thursday, March 28, 2024

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  1. phil

    Good morning!

    We had a nice sell-off going for a while but it reversed on the EU open but I can't see how this rally hasn't exhausted itself.  

    Still, last 3 trading days of the month and an OPEC meeting mean anything can happen and probably will.  The calendar is busy with a lot of data and 7 Fed speakers ahead of next week's Fed meeting and GDP tomorrow may be lower than the 2.9% estimate last time and, of course, Non-Farm Payrolls on Friday:

    Futures are at 19,100, 2,205, 4,860 and 1,345 (/NKD is 18,300) and of course I still like shorting the Russell as they've been up for 15 days but it's like looking at a roulette wheel that's come up red 15 times in a row – it seems like black is a good bet but why buck the trend and, in the end, it's a gambler's fallacy as either one is exactly as likely to happen on the next spin.

    The Dol;lar is 101.10, a bit lower than Friday's 101.5, oil is $46 after testing $45, /RB back to $1.377 and /NG $3.18 holding up very well.  Gold popped back to $1,191.

    And, don't forget – there IS a recount going on and that's going to cause uncertainty – even though it's not likely to change anything.

    Trump responds to recount efforts

    • The Clinton campaign is backing Green Party candidate Jill Stein's efforts to take a fresh look at voting results, stating it planned be a participant in recounts in Wisconsin, Pennsylvania, and Michigan.
    • President-elect Donald Trump called the decision a "scam" and "nothing would change," claiming that he won the popular vote as well as the electoral college if "the millions of people who voted illegally" were deducted.

    Trump quotes Hillary Clinton, rages against Wisconsin recount effort in hours-long tweetstorm

    Clinton to take part in recounts

    • Taking pains to try and appear to be keeping the whole affair at arms length, the Clinton campaign nevertheless says it plans to be a participant in recounts in Wisconsin, Pennsylvania, and Michigan.
    • From a blog post from Clinton campaign lawyer Marc Elias: "Because we had not uncovered any actionable evidence of hacking or outside attempts to alter the voting technology, we had not planned to exercise this option ourselves, but now that a recount has been initiated in Wisconsin, we intend to participate in order to ensure the process proceeds in a manner that is fair to all sides."
    • Green Party candidate Jill Stein says she's nearly raised all of her $7M goal needed to initiate recounts in those three battleground states (she's already done so in Wisconsin).
    • Trump's combined margin of victory in the three states was 107K votes, and while Elias says the campaign doesn't think that can be overcome, "we have an obligation" to those who cast ballots for HRC.

    Trump trades give in to gravity

    • Trades that performed best in the three weeks since Donald Trump's election victory are taking a breather, with the dollar and U.S. bond yields falling from recent peaks and equity index futures signaling stocks will slip from all-time highs.
    • The dollar could face further resistance in the week ahead given potentially risk-laden events such as the midweek OPEC meeting and Italy's Dec. 4 referendum on constitutional reforms.

    Industrial profits accelerate in China

    • Profit at industrial companies in China picked up last month as prices recovered, but growth was skewed towards high-polluting heavy industry.
    • According to the National Bureau of Statistics, profits in October rose 9.8% to 616.1B yuan ($89.1B).
    • The biggest gains were seen in the traditional raw material production sector and smaller returns in high technology and equipment manufacturing.

    Up To Eight Italian Banks May Fail If Renzi Loses Referendum

    This is what Europe's biggest bank expects from Italy's crucial referendum

    Italy needs reform and a euro exit is inevitable

    US Housing Market In Peril As "Increase In Mortgage Rates Has Shocked Consumers"

    Black Friday Sales Slump As Retail Tracker Admits Holiday Season "Off To A Slow Start", Blames Warm Weather

    Retail wars continue on Cyber Monday

    • ShopperTrak reports a 1% drop in store visits during the two-day period covering Thanksgiving and Black Friday.
    • The slight dip in traffic was largely anticipated as e-commerce growth continues to soar. Online sales for the Black Friday to Thanksgiving time frame were up 17.7% to $5.27B, according to an estimate from Adobe.
    • The Super Bowl of online shopping starts at midnight. The National Retail Federation expects 122M Americans to shop online tomorrow on Cyber Monday vs. 121M last year.
    • Early analysis indicates that Wal-Mart (NYSE:WMT) through its Jet.com add-on and Target (NYSE:TGT) via hard-hitting promotions are significant players in keeping up with Amazon online this holiday season.
    • Previously: Black Friday wrap: Records fall, retail winners and losers (Nov. 25)

    Black Friday online sales forecast to top $3B

    • Adobe estimates online Black Friday sales will top $3B for the first time as they rise 11.5% to $3.05B.
    • The firm also says that today could be the first day in retail history that $1B in sales will be generated by mobile devices.
    • Source: Bloomberg

    Black Friday Shoppers Curb Spending as They Chase Discounts. Holiday shoppers spent less money over the Black Friday weekend than in 2015, another sign that U.S. consumers remain wary about opening their wallets without deep discounts. Shoppers spent an average of $289.19 over the four-day weekend, including both online and offline purchases, the National Retail Federation said on Sunday, citing a survey conducted by Prosper Insights & Analytics. Consumers shelled out $299.60 in 2015, the trade group found. The weekend was characterized by heavy markdowns and a shift toward e-commerce, meaning there were smaller crowds at the mall. Forty-four percent of consumers did their shopping online, compared with 40 percent at brick-and-mortar stores. In either case, many of them were looking for just one thing: a good deal.

    Investment firms weigh in on Black Friday standouts

    • KeyBanc calls Amazon (AMZN -0.1%) and Wal-Mart (WMT +0.7%) early winners of the Black Friday shopping period based on channel checks.
    • The investment firm confirms other reports that mall traffic is light. Within the mall sector, Lululemon (LULU +0.2%), Victoria's Secret (NYSE:LB) and Gaps (GPS -1.4%) are called outperformers – while concerns are raised over Buckle (BKE +0.6%) and Vera Bradley (VRA +0.8%).
    • Cowen also sees Wal-Mart as a winner. Pink (LB) and American Eagle Outfitters (AEO+0.2%) are also doing wel, according to analyst Olivia Chen.
    • MKM Partners has an eye on margins. The combination of "virtually all" retailers offering broad discounts on store assortment and a low level of inventory heading into the shopping period is striking.
    • FBR Capital reiterates the broad theme that online sales are diluting Black Friday store traffic. Despite the overhang – Carter's (CRI +0.2%), Hanesbrands (HBI -0.3%), Chico's (CHS +0.7%) and Children's Place (PLCE +1.3%) are called out by FBR as standouts.
    • #BlackFriday

    Energy stocks on watch with OPEC mania

    • Oil prices are bouncing around the $46 level as traders bet on whether OPEC will slash output at its closely watched meeting on Wednesday.
    • While Libya has announced it won't take part in any OPEC cuts and Saudi Arabia hinted that the oil market would rebalance itself, some still feel the group will be able to rein in global oversupply.
    • Venezuela's oil minister will also meet his Algerian counterpart later today before the two meet with Russia to seek support for a production cut.


    OPEC deal to set market tone this week

    • A deal on Wednesday that delivers a concrete supply reduction of at least 1M barrels a day, with non-members such as Russia on board could boost oil beyond its recent $40-$50 range.
    • News before the weekend stating Saudi Arabia wouldn't attend a gathering with non-OPEC producers on Monday prompted a significant pullback, but crude prices could bounce around over the next few days as the group tries to resolve internal differences.
    • Tomorrow's talks will be converted into another OPEC-only meeting, sources toldReuters.

    Even If OPEC Gets a Deal, It Risks Reviving Battered Oil Rivals. Three days from a crucial meeting, OPEC’s deal to curb oil production and end years of global oversupply hangs in the balance. But even if ministers hash out a meaningful accord on Wednesday, there are dangers for the oil-exporter club. For two years, OPEC tried to bury a growing army of upstart producers by flooding the markets with crude. Reversing course might hand a lifeline to the battered survivors like Premier Oil Plc who are rushing to reap the rewards. The London-listed company, whose 60,000 barrels a day of output amounts to a rounding error for OPEC, expects to use hedges to lock in 2017 prices of at least $50 a barrel, a level Brent has only touched briefly this year. That means Premier Oil has adapted well enough to the assault to at least break even at half the price it received on the futures market in 2015.??

    Oil Industry Anticipates Day of ReckoningProspect of ‘peak demand’ prompts debate and long-term planning by global producers.

    An OPEC deal won't fix the oil glut

    Alberta to pay three power companies $1.36B to shut coal-fired plants early

    • Alberta's government says it will pay C$1.36B to three coal-fired electric generating companies – TransAlta (NYSE:TAC), Capital Power (OTC:CPXWF) and Atco (OTC:ACLTF) – for the province’s decision to close their plants early.
    • The government will pay a combined $97M/year, starting next year and continuing for every year until 2030, to shut down six of the companies' 18 power plants, with the other 12 plants in the province scheduled to close or convert to natural gas before 2030.
    • Alberta has said the changes it is making to the electricity market are needed to attract new, greener power plants in the province to offset the mandated closure of coal-fired generating stations by 2030.

    Carmakers on course to miss CO2 targets

    • Eight of Europe's largest carmakers are on course to miss carbon dioxide emissions targets that come into force in 2021, leaving them facing the prospect of billions of euros in fines.
    • Only four of the 12 largest companies – Peugeot Citroen (OTCPK:PEUGF), Toyota (NYSE:TM), Renault-Nissan (OTC:RNSDFOTCPK:NSANF) and Volvo (OTCPK:GELYF) – are on track to hit incoming EU goals, according to PA Consulting group, which advises many of the companies on manufacturing and technology.

    U.S. auto sales forecast to set a record in November

    • U.S. automobile sales are expected to increase 4.2% to a record 1.37M units in November, according to a forecast from Kelley Blue Book. The previous high for the month was 1.32M units.
    • This November includes two extra selling days than last year which provides an obvious boost. A high level of promotions around the Black Friday weekend is also seen as a sales driver.
    • KBB's forecast by automaker: General Motors (NYSE:GM) +8.6% to 249K, Toyota (NYSE:TM) +2.9% to 195K, Ford (NYSE:F) +0.1% to 187K, Fiat Chrysler Automobiles (NYSE:FCAU) -4.5% to 168K, Honda (NYSE:HMC) +9.1% to 126K, Nissan (OTCPK:NSANY) +8.3% to 116K, Hyundai-Kia (OTC:HYMLF) +7.0% to 113K, Subaru (OTCPK:FUJHY) +15.0% to 53K, Volkswagen (OTCPK:VLKAY) +5.5% to 47.5K.
    • Tesla Motors (NASDAQ:TSLA) isn't running up the volume quite yet to make the KBB list, but that is expected to change in 2017.

    China’s Ball of Money Is Rolling Back to Commodities. In China, money flow is tightly controlled and capital markets are relatively underdeveloped, meaning the economy works like squeezing a balloon. You press it in one place, and it bulges in another. Policy-maker moves to cool one expansion only serve to inflate another. Now that "gyration of bubbles," according to Société Générale SA’s chief China economist Wei Yao, has been heating up the commodities market again.

    Microsoft escalating emphasis on cloud services in China

    Everything Goldman Sachs predicts for 2017 — in one chart



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