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Full disclosure, fracking eliminated over 75% of my wife's Nat Gas monthly royalties, so I do have a bias. For several years some have been claiming that frackers are running a giant ponzi and as long as they can borrow no one cares. They used to say they would all go broke if oil dropped below 100. Well they are going broke right and left at $50 a barrel and the bond defaults are getting to be government sized. The fracking miracle is right up there with the Chinese empty cities.
Someday oil companies with long lived assets and lower debt will be a very attractive bargain.
Cautionary note for swing bulls, from J.Hirsh/STA..
When examining the history of June market performance after a down May, following a strong January to April, the analysis suggests that this June could produce above-average market gains. Early on, the market has not disappointed. The true test will arrive in the second half of the month, as the end of quarter nears. Historically, the second half of June has not been great for the market.
JPM’s Kolanovic used to be hot, now not.
HERE IS HIS MATH (WDIK?):
“If one takes that the average annual return of US equities was ~7% (current capitalization of ~$30T), the estimated cost of the trade war so far is about ~$3T. This may be a conservative estimate as many market segments benefited from flight to safety and declining yields, and without the temporary rally in “safe havens,” the market would likely trade lower. The market damage is ~100 times the tariffs collected, so it is clearly not making the country richer.”
zh: Wait until Marko realizes that the "estimated cost of trade" war would be vastly greater had the Fed not reversed and stopped what would be a full blown global bear market by now…
Kolanovic’s forecast was S&P 3000 by year end 2018.
zh: Marko's outlook is clearly far more negative, and the JPM quant now admits that "the US economy is facing a quite unique situation in which one individual can disrupt global trade and investment plans of US corporations, tax consumers on a broad range of imports, etc." …
BOTTOM LINE: THERE MUST BE PROGRESS ON TRADE, ELSE CONTRACTION AND RECESSION.
Why is he still not bearish? "Because this situation can ... be undone on short notice and many market segments already price in worst-case outcomes."
Disclaimer: I am not an investment advisor. This is just my opinion NOT investment advice.
Trades with cats wrote:Pasta Boss- My only quibble with Marko is he implies there is some sort of market based pricing system at work. That is debatable over the short term.
My only quibble is he's been wrong, so i hate him.
He thought potus would be more flexible and less crackpot... he radically overestimated him...
Disclaimer: I am not an investment advisor. This is just my opinion NOT investment advice.
Like to read more of my commentaries? Please subscribe my Daily Market Report. Subscribers can find all the members only posts HERE. StockCharts members, please vote for me HERE, thanks.
Like to read more of my commentaries? Please subscribe my Daily Market Report. Subscribers can find all the members only posts HERE. StockCharts members, please vote for me HERE, thanks.