I saw this mentioned on FOX last night. Seems like it should be getting more attention.
IMO FEAR of recession has been the only thing keeping WTI under $80/bbl.
Other positives for oil:
> Russian oil exports finally on decline.
> China's economy is growing again.
> Several members of the Wall Street Gang now noticing that oil demand exceeds supply.
> Confirmation that OECD petroleum inventories are on steady decline should push WTI over $90 by end of Q3.
Fed is no longer forecasting a recession
Fed is no longer forecasting a recession
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Fed is no longer forecasting a recession
TipRanks this morning: "‘Big Short’ Steve Eisman Says the Stock Market Will Continue Surging as No Recession Signs Emerge."
Futures on the Nasdaq 100 (NDX), S&P 500 (SPX), and the Dow Jones Industrial Average (DJIA) are inching higher following the Fed’s expected 25 bps interest rate hike. The latest hike brings the benchmark borrowing costs to a new target range of 5.25%-5.5%, the highest in 22 years. Fed Chair Jerome Powell said in the speech that the Fed will remain data dependent and any future rate hikes or pauses will be determined based on economic datasets. Traders seem to be ignoring Fed’s hawkish comments and continue to push the markets higher at the peak of the Q2 earnings season.
Boosted by inflation cooling down significantly, and ongoing strength in the jobs market, economic prognosticators have recently touted the probability of a soft landing for the economy instead of the previously dreaded prospect of a full-blown recession.
Steve Eisman, famous for predicting the housing fiasco of 2008 as told in the Big Short, is amongst those taking that optimistic view. “So far, there’s no evidence of a recession,” Eisman said recently. “So as long as there’s no evidence of recession, I think the market will probably continue to melt up.”
According to Eisman, as long as interest rates don’t rise significantly and investors remain unconcerned about the market’s high valuations, stocks will keep charging ahead. “People are chasing,” he goes on to add. But the question is, what should they be running after in this bullish environment?
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MY TAKE: If "Fear of Recession" fades and oil prices move firmly over $80/barrel, a lot of money will rotate into the very profitable companies in our three model portfolios. I recommend that you over-weight on the companies that get most of their revenues from crude oil sales. The large midstream companies in our High Yield Income Portfolio (OKE, PAA and PAGP) are the safe bets for those of you who are investing for high dividend yields.
Futures on the Nasdaq 100 (NDX), S&P 500 (SPX), and the Dow Jones Industrial Average (DJIA) are inching higher following the Fed’s expected 25 bps interest rate hike. The latest hike brings the benchmark borrowing costs to a new target range of 5.25%-5.5%, the highest in 22 years. Fed Chair Jerome Powell said in the speech that the Fed will remain data dependent and any future rate hikes or pauses will be determined based on economic datasets. Traders seem to be ignoring Fed’s hawkish comments and continue to push the markets higher at the peak of the Q2 earnings season.
Boosted by inflation cooling down significantly, and ongoing strength in the jobs market, economic prognosticators have recently touted the probability of a soft landing for the economy instead of the previously dreaded prospect of a full-blown recession.
Steve Eisman, famous for predicting the housing fiasco of 2008 as told in the Big Short, is amongst those taking that optimistic view. “So far, there’s no evidence of a recession,” Eisman said recently. “So as long as there’s no evidence of recession, I think the market will probably continue to melt up.”
According to Eisman, as long as interest rates don’t rise significantly and investors remain unconcerned about the market’s high valuations, stocks will keep charging ahead. “People are chasing,” he goes on to add. But the question is, what should they be running after in this bullish environment?
------------------
MY TAKE: If "Fear of Recession" fades and oil prices move firmly over $80/barrel, a lot of money will rotate into the very profitable companies in our three model portfolios. I recommend that you over-weight on the companies that get most of their revenues from crude oil sales. The large midstream companies in our High Yield Income Portfolio (OKE, PAA and PAGP) are the safe bets for those of you who are investing for high dividend yields.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Fed is no longer forecasting a recession
Higher energy costs = higher inflation = more Fed tightening = negative impact on economy
I wouldn't get the pompoms out yet.
I wouldn't get the pompoms out yet.
Re: Fed is no longer forecasting a recession
>"as long as interest rates don’t rise ..."
US interest rates rose significantly today hitting gold an silver and raising bond yields across the board.
The market gave up early gains and fell over 200
Since oil is priced in US dollars, and dollars are more expensive, look for oil to correct here. $ 80 might be a short term cap.
US interest rates rose significantly today hitting gold an silver and raising bond yields across the board.
The market gave up early gains and fell over 200
Since oil is priced in US dollars, and dollars are more expensive, look for oil to correct here. $ 80 might be a short term cap.