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Friday, 29 April 2016

US Economy Just Sputtering Along





U.S. economy stalls in first quarter as activity weakens broadly

U.S. economic growth braked sharply in the first quarter to its slowest pace in two years as consumer spending softened and a strong dollar continued to undercut exports, but a pick-up in activity is anticipated given a buoyant labor market.
Gross domestic product increased at a 0.5 percent annual rate, the weakest since the first quarter of 2014, the Labor Department said on Thursday in its advance estimate. Growth was also held back by businesses stepping up efforts to reduce unwanted merchandise clogging up warehouses.
Cheap oil, which has pressured the profits of oil field companies like Schlumberger (SLB.N) and Halliburton (HAL.N), remained a drag, sending business spending tumbling at its quickest pace since the second quarter of 2009, when the recession ended.
Almost all sectors of  the economy  weakened in the first quarter, with housing the lone star.
"The economy essentially stalled in the first quarter, but that doesn't mean it is faltering," said Joel Naroff, chief economist at Naroff Economic Advisors in Holland, Pennsylvania. "Some of the restraints to growth are dissipating. Growth is likely to accelerate going forward."


China’s Biggest Oil Company Posts 52% Decline in 2015 Profit

Total oil, gas output rose 1.8% to 259.5 million metric tons China National Petroleum Corp., the country’s biggest oil and gas producer and the parent of PetroChina Co., said profit fell 52 percent as lower oil prices punished global explorers. Profit last year fell to 82.5 billion yuan ($12.7 billion), the Beijing-based company said in a statement on its website Wednesday. The unlisted, state-owned company didn’t specify whether the profit is pretax, gross or net. Revenue fell 26 percent to 2 trillion yuan, while oil and gas output rose 1.8 percent to 259.5 million metric tons, it said. “We properly dealt with all the risks and challenges and steered the company from the model of chasing speedy expansion to a model focusing more on quality growth,” Chairman Wang Yilin said in the statement. CNPC owns oil and gas assets in politically unstable areas, including Sudan, and controls 86 percent […]


Saudi Aramco sets financing plans for industrial push

A surge of volatility in China’s once placid commodities futures markets has rattled industrial players who use them for hedging, with some taking losses or cutting exposure, driven out by a flood of speculative money from hedge funds and retail investors. NEW YORK Expectations for chemical company earnings have been boosted by a combination of lower crude oil costs during the commodity’s slump along with strong demand for plastics that are used to make everything from shampoo bottles to grocery bags. LONDON Major oil companies’ first-quarter results have so far not been as bad as feared but volatile trading operations and a likely fall in production mean any respite could be short lived. NEW YORK Oil prices jumped about 3 percent on Wednesday, hitting new highs for 2016 as the dollar weakened after the Federal Reserve announced it would leave U.S. interest rates unchanged. HOUSTON Exxon Mobil Corp […]


New oil discovery in Gulf of Mexico

 Otto Energy Ltd., a company with headquarters in Australia, said it made an oil discovery in the Gulf of Mexico that was productive enough to keep drilling. The company said it ran through columns of oil at its SM-71 well in the Gulf of Mexico and decided to deepen its drilling activity to ensure the entire targeted region will be evaluated. The cost to drill deeper, the company added, is within the original spending target. Matthew Allen, the company’s managing director, said he was “very encouraged” by the results so far. Otto Energy describes the prospect as part of a regional “low cost, high-chance-of-success” opportunity in […]


 upi.com 


Since mid-2015, corporate earnings and the S&P 500 have been moving in the complete opposite direction. Last time they had a complete negative relationship, it was back in 2009—when the stock market crashed.



Stock Market Crash: These Charts Are a Grim Warning for Investors


3 Charts Investors Shouldn’t Overlook

Mainstream stock advisors will never tell you this, but it’s true: the odds of an economic collapse and stock market crash in 2016 are stacking up higher each day.
When I want to know where the stock market is headed, I look at three indicators and they are very powerful predictors over a longer-term period. Those indicators are copper prices, corporate earnings, and how investors treat utilities stocks compared to technology stocks.

Stock Market Crash


Please look at the chart below of copper prices and the S&P 500. At the bottom of the chart, I have plotted the correlation between the two.
Since at least 2013, copper prices and the S&P 500 have had a positive correlation. You see, the stock market is generally considered a good indicator of economic growth/industrial production. And with copper being an industrial metal, the positive correlation between the two makes perfect sense.

Thursday, 28 April 2016

Financial Structure Overhaul Possible?

 


 



Why Real Reform Is Now Impossible 


The endless bleating of well-paid pundits in the corporate media about "reform" is just more circus.

It's difficult for well-meaning pundits to abandon the fantasy that meaningful reform is possible. Indeed, a critical function of the punditry and corporate media is to foster the fantasy that the status quo could be reformed if only we all got together and blah blah blah.
As I explain in my new book Why Our Status Quo Failed and Is Beyond Reformreal structural reform would trigger the collapse of the status quo. (As a reminder, the status quo benefits the few at the expense of the many.)
But there's another dynamic that makes reform impossible. I've prepared a chart to explain this dynamic:


Read More


Oil prices jump on weak dollar, strong investor appetite

Crude oil futures rose half a dollar in early Asian trading on Wednesday and remained near 2016 highs on the back of strong investor sentiment and a weak dollar, although analysts warned this month’s bull-run could soon run out of steam. International Brent crude futures were trading at $46.26 per barrel at 0023 GMT, up 52 cents, or 1.1 percent, from their last settlement. U.S. West Texas Intermediate (WTI) crude was also up 52 cents, or 1.2 percent, at $44.56 a barrel. WTI was further lifted after the American Petroleum Institute (API) reported a drawdown of nearly 1.1 million barrels in U.S. crude inventories last week versus a 2.4 million-barrel build expected by analysts in a Reuters poll. Both Brent and WTI were near 2016 highs of $46.49 and $44.83, respectively reached the previous session. Beyond […]


Chesapeake Has Bought Itself Time But Can It Survive?

The last year has been a bumpy one for Chesapeake Energy. When natural gas prices collapsed several years ago, many firms across the industry moved towards liquids as a panacea. The same group of execs that tanked the natural gas markets in the U.S. through over production went on to overproduce in shale, resulting in the current morass. It is little wonder then that firms like Chesapeake have had little refuge from the chaos in recent quarters. CHK reported a $2.2 billion loss in its most recent quarter, reflecting the market carnage. After a collapse of 90 percent in the 12 months ending in February, the stock bottomed at $1.50 a share. Since that time, CHK has rallied more than 400 percent, closing close to $7.00 a share by late April. While the company has been humbled, the stock still sports a market capitalization of more than $4 billion. […]

Gov. Cuomo Rejects the Constitution Pipeline, Huge Win for the Anti-Fracking Movement

In a win for climate activists and the anti-fracking movement , and a blow to fossil fuel polluters and the federal regulatory agencies that enable them, the New York State Department of Environmental Conservation (DEC) denied a key permit to companies seeking to build a 124-mile fracked gas pipeline. The Constitution Pipeline Project —a joint venture between four oil and gas companies—was proposed to transport fracked natural gas from Susquehanna County in Pennsylvania through Broome, Chenango, Delaware and Schoharie counties in New York to existing interstate pipelines. The pipeline route would have crossed hundreds of streams and wetlands, including those supplying drinking water to families along the proposed route. Using the power granted under the Clean Water Act, DEC officials rejected the companies’ permit application, citing damage the project would do to water supplies along the pipeline route. “Today is an incredible Earth Day! Thank you again to Governor […]
 resilience.org


Cheap oil smudges Exxon's long-held sterling credit rating





Exxon Mobil Corp lost its top-tier credit rating from Standard & Poor's on Tuesday for the first time in almost 70 years, as slumping crude prices crimp the oil giant's ability to fund projects and return big amounts of cash to shareholders.

S&P, a unit of McGraw Hill Financial Inc, cut Exxon's rating to "AA+" from "AAA," a one-notch demotion that leaves drugmaker Johnson & Johnson and Microsoft Corp as the only U.S. companies with the coveted, sterling rating that dozens of U.S. corporations enjoyed in the 1980s.

Though the downgrade was a symbolic blow for a company that prides itself on strength and discipline, the new S&P rating for Exxon is still as high as its ratings for the U.S. government bonds, widely seen as among the world's safest investments. Only two other U.S. companies, General Electric Co. and Apple Inc., have S&P's "AA+" rating.

Shares of Exxon, which is slated to post quarterly results on Friday, shrugged off the news, rising 0.34 percent to close at $87.63.

Exxon and other energy companies have been under pressure to return money to shareholders. It spent $210 billion on share repurchases over the last decade, and during the fourth quarter, paid out $3.6 billion in dividends and share repurchases, more than it earned.

Wednesday, 27 April 2016

Goldman Pegs Oil Between $20 -40 in New Industry Order




Goldman Sachs Pegs $20-40 as New #Oil Order Range



After a decade-long “investment phase” that helped unleash the shale revolution, oil is seeking a new equilibrium between supply and demand. Jeff Currie, head of Commodities Research for Global Investment Research at Goldman Sachs, describes how the market has entered an “exploitation phase” that puts downward pressure on prices.  

 PUTTING SENSE  TO  AN INDUSTRY'S TRANSFORMATION 

Image result for oil industry





Saudi Aramco: The Oil Giant’s Known Unknowns


If Saudi Aramco were to become a holding company with 5% or so of its… Saudi Arabian Oil Co.: A company that enriched its private investors for decades through what was called a “golden gimmick” beckons to foreign capital once again. That foreshadows how tantalizing, yet complicated, an investment in what is known as Saudi Aramco may be. If the national oil champion were to become a holding company with 5% or so of its shares listed on the stock market, it would be too large for investors to ignore. Based on what Saudi Arabia’s Prince Mohammed bin Salman estimated to be a potential market value of $2 trillion to $2.5 trillion, just its proposed float would be larger than supermajor BP BP -1.12 % or as valuable as ConocoPhillips COP -2.83 % and Italy’s ENI E 0.38 % combined. But a proposed initial public offering of the company […]


7 Must-See Commodities Charts  

Gold, being one of the leading commodities, has shown great strength in 2016. Uncoincidentally, gold has bounced right at secular support in January of this year. This is another proof that secular trend lines are extemely powerful. Note how this trend line was the last of three secular trend lines. As gold will retrace in the near future, it is imperative that the trend line is not broken to the downside, which would be the ultimate confirmation that the secular bull market is intact.




Oil and Gas Companies Turn to Digital Technology as Low Energy Prices Pressure Business

Oil and gas companies are turning to digital technologies to lower costs and improve efficiency as the industry struggles with low energy prices. Information technology budgets have decreased by 10% or more at oil and gas companies during the slump, according to IDC. Analysts say companies still are strategically spending in areas such as analytics, mobile, and cloud that can lower costs and, in some cases, help improve well production. Oil prices started to fall after a peak of $114.81 a barrel on June 20, 2014. The global Brent benchmark on the ICE Futures Europe exchange has dropped 61.2% over the last 22 months to $44.53 on April 21. During the same period average gas prices in the U.S. fell to $2.09 a gallon from about $3.70 a gallon. Plunging oil and gas has spurred cutbacks with 84,000 jobs lost in Texas, according to the Texas Alliance of Energy […]



Weakened Saudi Arabia Could See Social 


Unrest After Economic Shakeup



Despite oil’s rebound from cyclical lows and the world’s exuberance that the energy space may be saved (on the basis of headline-reading algo pumping momentum into commodity futures products that only leveraged Chinese speculators could find value in), something ugly is occurring in Saudi Arabian money-markets. There appears to be a growing funding squeeze in The Kingdom as 3-month interbank rates spike above 2 percent for the first time since January 2009, prompting King Salman to approve a ‘post-oil economic plan’. (Click to enlarge) Whether this spike is responsible or not, The Kingdom is clearly seeking ways to reduce its reliance on crude. As Bloomberg reports, King Salman approved a blueprint for diversifying the country’s economy away from oil on Monday, a package of developmental, economic, social and other programs. Saudi Arabia’s plan for the post-hydrocarbon era will have to overcome habits developed over decades of relying on 

Tuesday, 26 April 2016

From Oil Sands to "Solar Skills"

  


Amid Price Plunge, North American Oil and Gas Workers Seek Transition to Renewable Sector 



Lliam Hildebrand says he had a moment of clarity during an apprenticeship at a steel-fabricating shop in Victoria, Canada. He was learning the metal-working skills he would need to become a boilermaker, to eventually move on to work on the many steel vessels -- including furnaces, pipelines, "cokers" and "exchangers" -- that make up the oil industry's vast infrastructure in Alberta, Canada's oil sands fields.
During that apprenticeship, Hildebrand would come into the fabricating shop and see a pressure vessel on one side of the shop being made for the oil sands, and at the same time, on the other side of the shop, his own project -- a wind farm weather station. Hildebrand says he walked into the shop one morning, and the contrast between the two ventures struck him sharply. That was the moment when he realized, "We are the trade -- the building trade -- that's really going to help address [climate change]."
Oil sands boilermakers Joseph Bacsu and Lliam Hildebrand, and oil sands electrician Adam Cormier during their first press event Edmonton, Canada. (Photo: Mychaylo Prystupa)

From then on he has felt as though he's been living two lives. Coming out of his apprenticeship, he started looking for jobs in the renewable sector, but was unable to find work. Six years ago, he reluctantly decided to apply his skills where there were plenty of jobs: the Canadian oil sands fields.



Will Oil And Refugees Force European Intervention In Libya 


Europe is on track to send security experts to Libya after it successfully installed a so-called unity government that is willing to work with international agencies. A primary goal of this move will be to address the problem of the smuggling of people to Europe. The move is in the planning stage. EU officials have declared that help will be sent should the new government, called the Government of National Accord (GNA), ask for assistance, which it did earlier this week. The GNA has asked for help from the EU in general, with an emphasis on restoring the security of the country and dealing with militant groups. European officials have underlined that Europe’s involvement in Libya will not be military, but it seems this is a temporary decision. First of all, the GNA is not recognized by other unofficial governments that control different parts of the country, so its […]


Cheap Oil Doesn’t Light Fire for Big Japanese Utility

Like most energy importers, Japan’s gas utilities have enjoyed the collapse in crude oil prices. Yet the market is understating the risks at one utility, including its duplicate role as an energy investor. Osaka Gas , 9532 -1.49 % one of Japan’s largest suppliers of natural gas, imports liquefied natural gas that is often linked to oil prices. Though the utility passes on lower costs to customers, this comes with a lag, the effect of which is even more powerful if crude oil keeps falling. In the December quarter, Osaka Gas reported a 55.4% increase in net profit from the year before, despite a 10.5% decrease in sales. But while a sustainable oil rebound may be unlikely , neither may there be much room for it to continue falling . As some producers cut back, Brent futures are pricing a slight rise later this year. A liquefied natural gas […]

AP Exclusive: Test finds Chernobyl residue in Belarus milk

On the edge of Belarus’ Chernobyl exclusion zone, down the road from the signs warning “Stop! Radiation,” a dairy farmer offers his visitors a glass of freshly drawn milk. Associated Press reporters politely decline the drink but pass on a bottled sample to a laboratory, which confirms it contains levels of a radioactive isotope at levels 10 times higher than the nation’s food safety limits. That finding on the eve of the 30th anniversary of the world’s worst nuclear accident indicates how fallout from the April 26, 1986, explosion at the plant in neighboring Ukraine continues to taint life in Belarus. The authoritarian government of this agriculture-dependent nation appears determined to restore long-idle land to farm use – and in a country where dissent is quashed, any objection to the policy is thin. The farmer, Nikolai Chubenok, proudly says his herd of […]




Halliburton Fires One Third Of Global Staff: “What We Are Experiencing Today Is Far Beyond Headwinds”


In a brutally frank and painfully honest first quarter operational update, Halliburton president Jeff Miller poured freezing cold water all over the “oil is stabilizing, and everything is going to be awesome” narrative. After explaining that the firm has laid off one-third of its global employees, and pointing to the collapse in sequential revenues across every business unit, Miller exclaimed: “What we are experiencing today is far beyond headwinds; it is unsustainable.” Due to the deadline of its merger agreement with Baker Hughes Halliburtion has delayed its earnings conference call until May 3rd and so gave an operational update.

 The headlines were horrific: 

*HAL SEES OVER 30% DROP IN YR GLOBAL DRILLING, COMPLETION SPEND *HALLIBURTON CUT ABOUT 1/3 OF STAFF GLOBALLY *HALLIBURTON CUT OVER 6,000 JOBS DURING 1Q *HALLIBURTON SEES ADDITIONAL 50% DECLINE IN NORTH AMERICA SPEND ’16 *HALLIBURTON SAYS WORLDWIDE RIG COUNT LOWEST LEVEL SINCE 1999 *HALLIBURTON SEES […]


Monday, 25 April 2016

Iran Poised to Garner Market Share in #OIL


 Image result for iran and saudis battle political cartoon




Iran Might Still Outwit the Saudis on Oil


Iran's oil exports are growing much more quickly than analysts predicted back in January when sanctions were eased. If the recovery continues at its recent pace, it could raise an interesting dilemma at OPEC's next meeting in June.

Iran's Recovery

Oil production is closer to government plans than analysts' more pessimistic expectations

As Bloomberg reported earlier this month, Iran exported more than 2 million barrels per day of crude during the first half of April -- a figure calculated from tracking ships loading at Iranian export terminals. This compares with 1.45 million barrels a day in March. Neither figure includes the country's exports of condensate (a type of light oil recovered from gas fields)

Contenders or Pretenders
Tale of Two Charts
( First Financial Insights)

Saudi ArabiaIran       




$91 Billion In Capex Cuts, A Serious Hangover For Oil

Forty-seven years (!) after Simon and Garfunkel released ‘The Boxer’, and the bulls and the bears are slogging it out again. After trading blows in recent days, the bulls appear to have the upper hand, as technicals trump immediately weak fundamentals. Nonetheless, we are seeing a pullback today. Hark, here are six things to consider in oil markets today: 1) Jumping straight into economic data, we’ve had disappointing retail sales out of the UK before the Eurozone interest rate decision (still stuck at 0.0 percent, deposit rate still negative at -0.4 percent). We’ve subsequently had comments from ECB President Draghi that stimulus is working – and that loose monetary policy will persist for as long as it takes. The euro initially rallied, before unwinding again. 2) On to the U.S., and weekly jobless claims came in at 247.000, astoundingly a 42-year low. The Philly Fed was a party pooper, […]



Oil Majors Lose Faith In The North Sea – 100 Shut Downs Looming

Oil production from the North Sea posted gains in 2015 for the second year in a row, but the recent uptick in output could be a blip in the region’s long-term decline. Oil companies added 160,000 barrels per day last year from North Sea projects in the UK and Norway, according to the IEA . However, those gains came from projects that were planned years ago when oil prices traded above $100 per barrel. With Brent crude declining by more than 60 percent from mid-2014, North Sea oil producers have slashed spending, scrapped projects and are looking to sell off assets. The IEA summed it up in its latest monthly Oil Market Report: “North Sea projects fall victim to oil price slump.” For example, Det Norske, a Norwegian oil producer, is “shopping cheap assets” and is contemplating scrapping its Vette project, which it purchased from Premier Oil just last […]



Paris climate deal falls short, U.N. expert says

A U.N. expert says commitments so far under the Paris Climate Agreement are short of what’s needed to keep climate change in check. Photo by Debbie Hill/ UPI GENEVA, Switzerland, April 21 (UPI) — While the Paris Climate Agreement is a historic step in the right direction, commitments fall short of curbing global climate change, a U.N. expert said. Parties to an agreement adopted in December are set to sign off Friday on one of the more significant pieces of climate legislation in history. The agreement called for all parties to make strides to reduce greenhouse gas emissions to a level necessary to curb global warming to less than 2 degrees Celsius by the end of the century. Under the terms of the agreement, wealthier nations like China and the United States are expected to help finance the shift to a low-carbon economy from poor developing nations. “This target […]




Saudi Aramco IPO Could Be 5% of Value




Saudi Arabian Oil Co., the largest energy firm in the world, is considering listing up to 5% of its value on a stock exchange in New York within the next year, a top Saudi oil official said Thursday. By listing even a tiny fraction of the company, known as Saudi Aramco, the offering would create one of the world’s most valuable energy firms. Estimates of Saudi Aramco’s value have varied, but using a conservative number of $2.5 trillion , a 5% listing would give it a potential value of $125 billion—bigger than BP BP -0.38 % PLC and French oil titan Total SA TOT -0.49 % . The Saudis are considering listing Aramco at a time when the kingdom is trying to raise cash during a period of sharply lower oil prices and transition […]


Friday, 22 April 2016

Silicon Valley Faces Massive Layoff Carnage



The meltdown of Silicon Valley tech jobs accelerated Tuesday, as Intel announced 12,000 job cuts worldwide and a plan to dump product lines, despite reporting higher profits.


Silicon Valley in Meltdown as


 Intel Slashes 12,000 Jobs




Intel Corporation (INTC: NASDAQ) reported that first quarter net income rose 2.7 percent to $2.05 billion, and sales climbed 7.2 percent to $13.7 billion. The earnings were 14 percent higher than expected, and the sales were in line with expectations.
But during what was anticipated to be an upbeat earnings call, new President Murthy Renduchintala, brought in from Qualcomm in late November, announced he was presenting a plan to CEO Brian Krzanich to slash employment by 11 percent and give CFO Stacy Smith direct control of manufacturing, sales, and operations.
Krzanich immediately followed up with an email to employees stating, “These are not changes I take lightly. We are saying goodbye to colleagues who have played an important role in Intel’s success.”
Although Intel expects to take about a $1.2 billion restructuring write-off for the layoffs this quarter, the move will save $750 million in expenses this year and generate estimated annual savings of $1.4 billion by the middle of 2017, according to SiliconValley.com.


Said Intel CEO Brian Krzanich in an email today to employees, “These are not changes I take lightly. We are saying goodbye to colleagues who have played an important role in Intel’s success. We are deeply committed to helping our employees through this transition and will do so with the utmost dignity and respect,” and promised more details soon.


Here we are six weeks later. IBM has said little more about the layoffs publicly, yet they don’t appear to be over. The March round appears to have been the beginning, not the end. A Facebook group, Watching IBM, is gathering reports from around the world. These dispatches are by no means comprehensive, but are at least painting a rough picture of what is going on.


The compact is a historic, and rare, regulatory framework. Unlike the divisive water-sharing laws for the Colorado River and others in the West, the Great Lakes compact includes language that emphasizes sustainability, transparency, conservation and efficiency.
"The compact is more about governing the resource collectively as a common pool for the public domain," said Jenny Kehl, a professor at the University of Wisconsin, Milwaukee, who studies water resource issues





Why Organized Religion Fears Educated Women


Educating women improves the welfare of families as they become empowered to contribute to the financial success of their household—which in turn creates more opportunities and resources available for their children.




For thousands of years women have been defined only in correlation to their relationship to men. They have been kept hidden, prohibited from speaking, forced into submission and treated as the “unclean” gender whose existence is that of mental and physical servitude to her human counterpart. Why has so much emphasis been placed upon the mind and actions of women? What does organized religion fear about the mind of an educated and logically-thinking woman?
Here are 5 reasons why organized religion fears educated women:

The loss of patriarchal control

Image result for big brotherIt is a widely-known fact that the more educated and financially stable a woman becomes, the more likely she is to practice family-planning and have her children at a later age. Educated women are also more likely to have fewer children than their uneducated and impoverished female counterparts.
Furthermore, educated women are more likely to cultivate their own worldview, rather than simply following their traditional familiar teachings; and may contribute no followers to a religion when they do finally decide to start a family.
This is a problem for religion because women who choose the timing and size of their household don’t typically contribute the same amount of future-followers to a religion as those women who are restricted from pursuing an education and career. If a woman leaves the religion altogether as a direct result of becoming well-informed and financially stable and no longer needs the “comforts” that her religion once provided, she has not only removed herself from the ranks, but her children as well. For religion to perpetuate itself, it must have followers, or it ceases to exist.

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