November DDD

[ducati916]

Oil News:

Immediately after Donald Trump’s re-election as US president was confirmed, clean energy stocks have plunged with solar producers such as Sunnova or First Solar plunging by 50% and 20%, respectively, in just one day.

- Renewable energy developers paused several investments over the past week until there’s more policy clarity from the future Trump administration, having already invested $450 billion in new projects since the passage of the IRA.

- Whilst Trump’s stance vis-à-vis the IRA remains vague, analysts estimate that renewable deployment could fall 30% if currently offered tax credits are phased out and there are new tariffs on imported equipment.

- Solar and wind capacity grew 32% and 69% respectively during Trump’s first term as president while overseeing a doubling of EV sales between 2016 and 2020, albeit from a lower baseline.

Market Movers

- QatarEnergy agreed to buy a 23% stake from US oil major Chevron (NYSE:CVX) in the North El-Dabaa offshore exploration block in Egypt for an undisclosed sum, expanding its global footprint.

- UK-based energy major Shell (LON:SHEL) confirmed a discovery with its 130 BCf Selene gas prospect in the UK North Sea, hitting a 100-meter net gas column at a water depth of 3,370m.

- US shale firm Ovintiv (NYSE:OVV) surpassed analyst expectations with its Q3 results, citing the fastest-ever quarter for drilling speed, up 28% year-over-year at more than 2,170 feet per day drilled.

Tuesday, November 12, 2024

While US markets are speculating about Trump’s pick for Energy Secretary, oil futures have been steadily declining with WTI dipping well below $70 per barrel and ICE Brent holding out at $72 per barrel. Unimpressive inflation data as well as disappointing stimulus measures have put China back into the limelight, further squeezed by the ongoing strengthening of the US dollar. OPEC has since added to demand concerns by cutting its oil demand forecast for a fourth consecutive month.

Trump May Pull Out of Paris Climate Agreement. Just as the COP29 conference is about to start in Baku, the future Trump administration might withdraw from the Paris climate agreement and ease US commitments to allow more drilling and mining, as well as lifting the Biden-era LNG permitting ban.

White House Finalizes SPR Refillments. In the last installment of the Biden Administration's SPR replenishments, the US Department of Energy bought 2.4 million barrels of sour crude from Macquarie and midstream firm Energy Transfer, to be delivered in April-May 2025 to Bryan Mound.

Shell Wins Landmark Appeal Against Dutch State. The Appeals Court in the Hague dismissed a 2021 ruling that ordered Shell (LON:SHEL) to cut its total carbon emissions by 45% by 2030 compared to 2019 levels, based on a case brought by climate activist group Friends of the Earth.

Ukraine Hikes Gas Transit Fees. With Europe tacitly watching the Ukraine-Russia gas transit drama, Kyiv wants to more than double entry tariffs for natural gas transportation for 2025-2029, citing a substantial decline in transportable volumes and changing the currency of tariffs to euros.

Saudi Exports to China Disappoint Again. Saudi Arabia’s crude oil deliveries to China are expected to fall to 36.5 million barrels in December, the second straight month-over-month decline after 37.5 million barrels in November and 46 million barrels in October, attesting to weak Chinese demand.

Russia Mulls Merging Of Key Oil Companies. According to the Wall Street Journal, Russia is considering merging its three largest oil companies Rosneft, Gazprom Neft, and Lukoil to create the world’s second-largest oil producer, although the companies themselves have refuted this.

Beijing and Jakarta Double Down on Metals. In his first presidential visit as Indonesia’s new President, Prabowo Subianto flew to China, agreeing to build a new nickel smelter in Central Sulawesi and expanding cooperation between the two states into lithium batters and photovoltaics.

COP29 Starts with Carbon Credit Breakthrough. COP29 participants in Baku have adopted new standards for carbon credits under the Paris Agreement, although there is still no agreement on how countries can use their carbon credits to meet their greenhouse gas reduction targets.

US to Triple Nuclear Capacity by 2050. Before leaving office, the Biden administration could formalize a 2050 target to triple nuclear power capacity by 2050, deploying an additional 200 GW of new reactors to the 100 GW existing, as the idea of boosting nuclear enjoys bipartisan support.

India’s Coal Demand Boom Slows Down. India’s imports of thermal coal dipper by a third year-over-year, falling to 13.56 million tonnes and marking the first consecutive decline in more than a year, thanks to improving hydropower and solar generation as overall power output has also been cooling.

Copper Prices Plunge on Trump Disruption Risk. Front-month copper futures extended their slide this week, with COMEX prices falling to $9,320 per metric tonne, shedding 6% since the re-election of Donald Trump raised risks of a global economic slowdown in case the 60% China tariff is implemented.

India Doubles Down on Its Oil Ambition. India’s Oil Minister Hardeep Puri stated the South Asian nation will see rising fossil fuels demand until at least 2040, reiterating its ambition to boost refining capacity by 80% to 9 million b/d and meet a net zero emission target by 2070.

Angola Lures Oil Investors With Forgotten Fields. Angola’s government has offered 10 dormant discoveries once found by oil majors that subsequently never tapped into them to oil investors, scattered across four offshore blocks and containing a proven reserve total of 500 million barrels.





The only thing holding the market higher currently is the low POO.

If POO was higher, the USD at these levels would be causing UST dysfunction.



Some history:


Politicians shouldn’t judge themselves by the stock market. But it’s happening again. Here follow some cautionary tales on what the post-election rally in stocks does and does not portend for the US economy over the next four years.

Scott Bessent, for many years a leading investor for George Soros, may very well be the next Treasury secretary. The Polymarket prediction market (which hasn’t gone away) puts his chances at 70%. In an important op-ed for the Wall Street Journal, he has set out an agenda for economic policy that’s worth reading. Headed “Markets Hail Trump’s Economics,” it makes this claim:

Asset prices are fickle, and long-term economic performance is the ultimate measuring stick. But recent days prove markets’ unambiguous embrace of the Trump 2.0 economic vision. Markets are signaling expectations of higher growth, lower volatility and inflation, and a revitalized economy for all Americans.

It’s necessary to be careful with this. Asset prices are indeed so fickle that it’s unwise to draw too many conclusions just yet even from the emphatic rally that has followed the election. It’s certainly true that the stocks thought most likely to benefit from a Trump administration, rather than from a Democratic alternative, have enjoyed quite a rally, and shown that the victory was not priced in before Election Day:


In the following chart, I have compared the Dow Industrials’ performance from Election Day in 1928, when Herbert Hoover was chosen president, to its performance since a week ago. They’re very similar:


Does this prove that Donald Trump’s second term will pan out like Hoover’s? Of course it doesn’t. And that’s just as well, as this is what happened to the Dow in the four years between Hoover’s election and his landslide defeat to FDR in 1932:


Again, to be clear, a primitive overlay chart is no kind of evidence that the stock market is destined for a crash like 1929. The point is that the post-election rally doesn’t prove anything either way.

What predictions can we more safely make? Generally, the single most important factor in the long-term performance of an investment is the price at which you bought it. If it was too expensive, you’re much less likely to do well out of it. This is how two of the most simple valuation metrics for the S&P 500 — its ratio to sales and its ratio to book value — have moved over the last 30 years. On the former, the market is very close to the record set in the the post-Covid boom in 2021. On the latter, it’s almost taken out the all-time high from the dot-com bubble in 2000:


Nothing proves that the stock market is about to fall as it did on those two occasions. But the higher the valuation, the higher the odds against continued strong performance. In general, it would be unwise for any politician to seek to be judged by share prices at present, as it involves setting a target on their back.

Using a subtler metric, Robert Shiller’s CAPE (cyclically adjusted price/earnings) multiple aims to correct for the market’s moves within the economic cycle by comparing share prices to average inflation-adjusted earnings over the previous decade. Shiller has calculated the ratio back to 1881, and the following chart is taken from his website. On this basis, only one presidential election has previously taken place with the stock market so expensive, in 2000, when George W. Bush emerged victorious. The CAPE is calculated monthly. On Nov. 1, 2000, it was 38.78; on the first of this month, it stood at 38.11:


With this post-election rally, the CAPE is now higher than when Bush took office in 2001, amid the fallout from the dot-com implosion. It’s possible that Trump 2.0 will unleash a new paradigm for stock investing and take valuations to previously unimagined heights. It’s more likely that performance won’t be great, for reasons that have nothing to do with his economic policies.

Beyond stocks, other post-election Trump Trades also urge caution. The spread of high-yield bonds’ yields over Treasuries, a crucial measure of the compensation you receive for lending to companies with weak credit, has dropped to a 17-year low in recent days, according to Bloomberg indices. The spread was only tighter for a matter of days in the summer of 2007. On that occasion, spreads rose quickly as the structured credit market based on subprime mortgages began the collapse that ended with the Global Financial Crisis:


Again, this absolutely doesn’t prove, or even suggest, that we’re about to stage a repeat of the GFC. It does, however, strongly indicate that markets are very ungenerously priced for anyone who wants to enter. Any worsening of credit conditions, starting from these highs, would hurt. It might be wise for incoming politicians to talk down the significance of the stock market, emphasize that it looks expensive, and seek to be judged by more or less any other metric.

There is one important market, however, where the immediate post-election Trump Trade has reversed, and this is healthy. Treasury bond yields surged higher as the results came in, signaling alarm that tax cuts and tariffs would mean inflation and higher rates from the Federal Reserve. But after surging some 20 basis points in a matter of hours, the bond market (closed Monday for Veterans Day) calmed down swiftly. By the close on Friday, it had completed a round trip:


It might make sense for the Trump team to treat this as a meaningful shot across its bow, but also take some comfort that there wasn’t appetite to keep yields that high. Even back at 4.3%, the 10-year yield makes it somewhat harder to justify current stock market valuations. Another chart from Shiller’s website shows the extra cyclically adjusted yield paid by stocks compared to long-term bond yields. The lower the excess yield, the less attractive stocks look compared to bonds:


One critical component of bond yields is the policy rate set by the central bank. At the beginning of October, the fed funds futures seemed convinced that policy rates would fall below 3% by January 2026. Now, that figure is close to 4%. The shift in rate-cut expectations as confidence took hold that Trump would return to the White House has been something to behold:


This is good for the Trump administration in that the Fed has less need to cut rates if the economy is growing, so it does show some confidence in growth. But it also suggests that price rises will make it harder to cut. Conventional wisdom has already coalesced on the notion that the Democrats’ defeat was chiefly attributable to their failure to stop the inflation spike. It’s politically imperative to avoid another one. On this front, the bond market is less emphatic. Two months ago, the 10-year inflation breakeven, its implicit forecast of average inflation for the next 10 years, came close to 2.0%, the Fed’s target. In the aftermath of the election, it touched 2.4%. The good news is that it has ticked back a little from there, and remains lower than for much of the last two years:


There’s no great reason for alarm in the bond market. The vigilantes are keeping a watching brief for now. But the markets are not signaling confidence in lower inflation, while fed funds expectations make it harder for stocks to keep rallying.

All of this said, when markets develop momentum, it’s dangerous to get in their way. The crypto market shows clear evidence of frothy excess, but it also shows very strong confidence that will be difficult to dislodge:


And trends, once established, are difficult to change. For the most spectacular example, this is how the MSCI EAFE index (for Europe, Australasia and the Far East, effectively the non-US developed markets) has performed relative to the US over the last 25 years. EAFE has dropped in absolute terms since the election (so a Trump victory isn’t being hailed as a positive development outside the US). Unlike America, stocks in these countries almost all look quite cheap on metrics such as the CAPE. But who is going to have the courage to get in the way of a trend like this one?


In conclusion: Yes, the markets have had a positive response to the election. The calmness of bond yields is actually more important and reassuring than the rally in stocks. And with stocks looking exceptionally expensive, it’s very, very unwise for any politician to ask to be judged by them.


jog on
duc

 

[ducati916]

So bitcoin is described as a 'harder asset' than gold. This is based on the limited supply of 21M coins, as opposed to the gradually expanding supply of gold being mined every year.

I would apply Karl Popper's argument to this.

No matter how many days/years have passed without someone being able to create a new bitcoin, this remains unproven. The first time a new bitcoin is created, this proves the first assertion false.

BTC is man-made. It has been designed to be 'unbreakable'. The bet is that this is a true statement. The bet is against the advance of technology and man's inventiveness.

If there is a successful, let's call it forgery, BTC immediately goes to zero based on the current arguments for its valuation.

Gold on the other hand has resisted man's inventiveness for 7000yrs+.




The PUT/CALL ratio reached an extreme from an extreme.

Oil is still keeping a lid on the danger of a high USD.



Liquidity came into the Bond market biggly. No idea where it came from currently.



Obviously the UST market was having issues. The number of 'fails' was very high which indicates hoarding by the Primary Dealers (usually) or some of the larger players, Insurance Co, Pension Funds, etc. My guess is that it came from the Treasury via the TGA, although due to the way that data is provided it won't show for a while or the Fed.

If POO starts to rally, watch the 10yr yield start to move higher and stocks start to fall.

To me it looks like POO has bottomed in its range and will trade higher. With the USD where it is, $80 oil could be an issue.

jog on
duc

 

[ducati916]

Of the more than 1,800 earnings reports we've gotten since earnings season unofficially began on October 11th, 64.7% of companies have beaten consensus analyst EPS estimates, while 60.8% have beaten sales estimates. As shown below, Health Care and Technology have had the strongest beat rates this season, while Materials and Utilities have had the weakest results relative to expectations.

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While things like beat rates and guidance are important, the ultimate arbiter of an earnings report is how the stock price reacts to it. In that regards, below is a look at the average one-day share price change for stocks in reaction to their earnings reports this season by sector. As shown, stocks in the Industrials and Consumer Discretionary sectors have reacted the most positively to their Q3 earnings reports, with average one-day gains of more than 1.4%. On the flip side, three sectors have seen their stocks average declines in reaction to their earnings reports this season: Consumer Staples, Real Estate, and Materials.

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Below is a look at some of the Consumer Discretionary stocks that had the best one-day reactions to their earnings reports this season. As shown, online learning company Stride (LRN) ranks first with the 39.11% gain it saw back on 10/23. Shoemaker Wolverine (WWW) ranks second with a one-day jump of 35.8%, followed by other consumer cyclical names like Xponential Fitness (XPOF), Dutch Bros (BROS), Revolve Group (RVLV), Peloton (PTON), and Under Armour (UAA).

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On the flip side, below is a look at some of the worst performing Consumer Staples stocks on their earnings reaction days this season. Estee Lauder (EL) is at the top of the list with a 20.9% drop seen on 10/31. Other staples stocks on the list include names like Hain Celestial (HAIN), TreeHouse Foods (THS), Beyond Meat (BYND), Instacart (CART), and Anheuser-Busch Inbev (BUD). Again, we'll have much more coverage of results from this earnings season in tomorrow's Bespoke Report newsletter, so sign up now with our $500 off first-year special to receive it in your inbox when it's published!

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Who has been making the Trump trades, and how much do they think last week’s election has changed things? Obviously, there’s some testosterone-assisted excitement buoying the most speculative trades such as Bitcoin, but the gains have been much broader than retail investors could have delivered on their own. The latest edition of Bank of America Corp.’s monthly survey of global fund managers suggests that the world’s biggest allocators see the election as a turning point.

BofA had done most of the survey work before election night, but about 20% of responses came in after the results were known. There is always the chance of noise, but breaking down the differences among the managers who could give their answers with the uncertainty lifted is very intriguing. Even before the vote, managers were rating a “no landing” — in which there is no significant economic slowdown and rates have to rise again — as a 25% shot. After the election, that rose to 33%:


With overheating the greatest risk, it’s not surprising that fund managers moved to put a much bigger weighting into equities. After the election, the percentage of respondents who said they were overweight in equities suddenly rose to an 11-year high. Coming from a survey of professionals, this is startling bullishness:


The biggest downside of Trump 2.0 is that the risk of inflation is perceived to increase. On this issue, the election drove an even greater swing in expectations. After a period of overwhelming confidence in a decline, a small majority now thinks that global inflation will rise in 2025:


That is the pressure that the Fed and the Trump administration will have to gauge over the months ahead. The other clear and dramatic shift in expectations was geographic. Prior to the election, it was popular to bet that the yen would outperform next year. People weren’t so positive about the dollar. That turned around on Nov. 6. The dollar is now favored to overperform, investors are more bullish about gold, and optimism about the euro and the Chinese yuan evaporated:


There was a similar turnabout when it came to stocks. Most managers had thought that global stocks should beat the US next year, a reasonable bet given the current gap in valuations. That reversed after the results came in, while the contingent of bond bulls dwindled:


Does this make sense? Tariff barriers on the scale that Trump discussed on the campaign trail would be a really serious problem for more open economies. There is also the evidence of Trump 1.0. From his election in 2016 until the pandemic turned everything upside down in early 2020, the US stock market clobbered all others:


The second Trump administration looks likely to have much more room for maneuver. Trump’s first year in power last time was marked by what was dubbed a “synchronized global recovery,” in which US stocks slightly lagged the rest of the world. This changed once the US tax cut had gone through and tariffs started to roll out. Nicholas Colas, founder of DataTrek International, says the following:

You can rest assured that every global asset allocator is looking at this data right now as they ponder where to put equity market capital over the next four years, and its message is clear. A very large and economically powerful country with an explicitly nationalistic set of government policies will logically see better returns than the alternatives. That the history shows it generates better returns than literally any viable alternative only underscores this fact.

All of this is happening with US stocks starting more or less as expensive as they have ever been. That makes a big bet on America rather hazardous. But nobody is more conscious of overvaluation in the stock market than big fund managers, and they’re making the America First bet anyway. Irresistible force, meet immoveable object.

Subtlety has been in short supply recently, particularly on the increasingly political subject of inflation. That’s a pity because the problem in the US is now a finely balanced one, and policymakers will require great subtlety to deal with it. A fair amount is at stake.

The latest US inflation data show that the issue is largely under control, but not that it can now be safely ignored. It’s a pattern that is growing familiar, and clarity about the next step is still elusive. In essence, energy and goods inflation is now slightly negative, food prices aren’t rising by much, but services — where salaries tend to be a particularly strong driver of prices — remain problematic. That leaves overall inflation above 3%, and still too high for comfort:


The various specialist statistical measures drawn up by different teams of economists within the Fed confirm that inflation remains above 3% (the top of the Fed’s targeted range) and is no longer clearly declining. This is true of the Cleveland Fed’s median and trimmed mean (stripping out outliers and averaging the rest), as well as the Atlanta Fed’s measure of sticky prices that are difficult to move:


Moreover, the most problematic sectors have stopped falling. Both core services excluding shelter (the Fed’s so-called supercore, which has been given much emphasis over the last couple of years) and shelter ticked up very slightly and remain above 4%:


A diffusion index from TS Lombard’s Steven Blitz illustrates in another way that disinflation (decline in the rate of price rises) is over. This chart shows the proportion of inflation components whose three-month rolling average is above their 12-month rolling average, an indicator of how many are trending upward. The figure now stands at 50% , which is unremarkable, but it’s doubled since the beginning of the year. That’s hard to square with any notion that progress is still being made toward target:


Taken together, the data probably don’t justify another rate cut next month. However, the Fed has a dual mandate. The latest employment figures showed weakness, and so on balance the path of least resistance is to cut again, but only by 25 basis points. Further, there’s a general expectation in the market that another cut is coming, and it might be dangerous to disappoint those hopes when the post-election markets are already volatile. Market reactions on Wednesday were muted in the knowledge that the Federal Open Market Committee will have fresh monthly reports on both inflation and unemployment to look at before they next meet. In that context, the October CPI needed to be a significant surprise in either direction to move the expected path of rates, and it wasn’t. Carl Weinberg, chief US economist at High Frequency Economics, said:

Our outlook for the Dec. 18 FOMC meeting is that a rate cut is likely but not assured. Today’s CPI data do not affect that outlook. Fed Chair Powell said he was confident that progress toward the inflation target would persist. So inflation metrics still above target in this report are neither a surprise nor a threat to future rate cuts.

The Fed needs to continue its dialogue with the market, which has loosened financial conditions in the last week by bidding up stocks, while tightening them by raising bond yields. There are any number of ways to measure exactly how tight conditions are, and the current bout of speculative exuberance makes it hard to believe that they’re very restrictive. But the Fed might take notice that the 10-year Treasury Inflation-Protected Securities yield, widely regarded as the best pure measure of real long-term interest rates, is settling above 2% again. If that doesn’t sound like much, be aware that it stayed below 2% for 14 years until 2023. Conditions are meaningfully tighter than many currently working in finance have ever known.

Definitional issues now grow more complicated, as Jerome Powell argued last year that the real rate should be defined as the fed funds rate minus the one-year inflation breakeven. This produces a much more volatile figure, and at the time it was considerably higher than the TIPS yield, so it was seen as the beginning of an argument that the Fed could afford to cut. Another popular real rate just subtracts core CPI from the fed funds rate.

Those three measures are illustrated below. Adding the extra definitions shows 1) that it really was mad to leave rates so low for so long after the pandemic, and 2) that we can now agree that the real rate is a high but not extreme 2% (ish):


Then there’s the possibility of big changes in macroeconomic policy once Donald Trump takes office. If selections for his economic team create anything like the uproar that the nomination of super-loyalist Representative Matt Gaetz for attorney general has done, markets will get very interesting. Whoever gets the job will grasp that the new administration has a mandate both to pursue aggressive trade policy and to put a lid on inflation, and that the two could come into conflict. They, and the market, will have to strike a balance.

Until we know the Trump team, it seems a fair bet that the Fed cuts next month (an 86% chance, according to fed funds futures), but then stops to await developments, with only a 16% chance of another cut in January. Blitz puts the case this way:

In sum, with 4.1% unemployment, renewed real consumer spending power, and ongoing Federal spending, there is little reason to expect inflation to drift lower. There are one-offs in any month — auto insurance, used cars — but inflation is stabilizing at a level that reflects general macro conditions. One more cut coming from the Fed, call it unemployment insurance, then watch and wait to see what Trump’s planned disruptions deliver.

And one final note, which isn’t great for political harmony. When it comes to the biggest item in my own household’s budget, it looks like the tide may have turned back toward rising college tuition fees. They increased far faster than general inflation for the first two decades of this century, as colleges steadily made themselves unaffordable, but the pandemic appeared to have broken something. Universities barely raised prices at all as they tried to adapt to a new world and prove they were value for money. This was the first month since the pandemic when tuition inflation was as high as headline CPI again:

6) Buffett Getting More Bearish?​

Is Warren Buffett getting more bearish?​

Judging by his actions, it certainly seems so.​

Berkshire Hathaway’s Cash Pile has spiked to a record $325 billion, more than doubling over the past year. $35 billion of the $48 billion increase in cash during the 3rd quarter came from net stock sales with Berkshire continuing to sell its stakes in Apple and Bank of America.​

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Berkshire Hathaway is now holding over 28% of their Assets in Cash, the highest percentage since 2004. Its historical average cash position: 14%.​

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Why might the greatest value investor of all time be raising cash?​

Higher valuations and the lack of compelling opportunities.​

Berkshire’s largest holding, Apple, now trades at 37x earnings and 9x sales. Back when Berkshire first purchased the stock in 2016 it sold for just 10x earnings and 2x sales.​

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Overall US equity valuations continue to rise as well. The S&P 500’s CAPE Ratio has crossed above 38 for just the 3rd time in history and is now higher than 98% of historical valuations.​

So 'officially' inflation will be the policy.

There never really should have been any doubt. The US simply cannot default through non-payment of $250 Trillion of debt. The global economy would simply collapse.

We will have policy driven inflation and likely yields (YCC) will be capped at some arbitrary number.

Earnings and P/E levels of stocks hate inflation.

We are currently in a melt-up, parabolic move, call it what you will in stocks. How much higher before they implode? Buffett who has lived through and profited from a number of these is moving to cash. Do you think he is past it? That you know better? LOL. You'll see the top and exit.

Remember stocks hate recessions. This recession has been put off for a while via the Treasury and Fed pulling every card they can from the deck. Economic forces always win in the end. The employment data is bad and getting worse. A recession will cause already terrible deficits to become biblical.

jog on
duc

 

[ducati916]

Something will break:



USD can only be at this level with POO low.

POO rises, UST market blows up as there is a rush to obtain USD.




jog on
duc

 

[ducati916]

Oil News:

Friday, November 15th, 2024

Steep gasoline and diesel inventory draws in the United States have helped offset the overwhelmingly bearish sentiment in the oil market, although it wasn’t enough to halt the decline in oil prices. With China posting its seventh successive month of refinery run declines and Jerome Powell cooling down expectations on U.S. interest rate cuts, Brent below $72 per barrel feels justified.

Chinese Refinery Runs Keep on Falling. China’s refinery throughput in October fell by 4.6% year-over-year to 14.02 million b/d, the seventh consecutive month of year-over-year declines, with independent teapot refiners in Shandong province bearing the brunt of that pain as their utilization rates plunged to 58%, almost 20 percentage points lower than they were a year ago.

OPEC Cuts Oil Demand Growth Projections Again. OPEC has trimmed its global demand growth forecasts for 2024 and 2025 for a fourth month in a row, mostly through lowering China’s consumption upside to 450,000 b/d from 580,000 b/d from last month’s monthly oil report, expecting 2024 demand growth to come in at 1.82 million b/d.

US Top LNG Developer Eyes IPO. Venture Global LNG plans to raise around $3 billion from its initial public offering that could happen as soon as this year, with the Virginia-based firm working with Goldman Sachs and JPMorgan Chase on the listing, potentially one of the biggest IPO’s of either 2024 or 2025.

Germany Blocks Arrival of Russian LNG Cargo. Despite there being no EU-wide ban on Russian LNG, Germany has refused to allow a Russian LNG shipment at its Brunsbuettel terminal in northern Germany, saying the country does not import Russian gas as a matter of principle without specifying who was the buyer.

IEA Warns of Extreme Oversupply in 2025. The International Energy Agency believes that global oil supply would exceed demand by a whopping 1 million b/d in 2025, equal to almost 1% of total production worldwide, driven by the U.S., Guyana and Canada, keeping its demand projection for next year unchanged at 990,000 b/d.

White House Sets Methane Fee Guidelines. In one of its last policy moves, the Biden administration has finalized a methane fee for oil and gas producers, starting at $900 per metric tonne of methane emitted and increasing to $1,500 per metric tonne in 2026, as mandated by the 2022 Inflation Reduction Act.

North Sea Drillers Are Fighting for Projects. Equinor’s state oil firm Equinor (NYSE:EQNR) and energy major Shell (LON:SHEL) urged the Edinburgh court to uphold their Rosebank and Jackdaw projects, respectively, as they are both fighting a legal challenge from environmental campaigners Greenpeace that claim the two projects were greenlightes unlawfully.

Gazprom’s Arbitration Quagmire Sends Europe Gas Soaring. Europe’s benchmark TTF natural gas futures jumped to their highest level in 2024 so far, hitting €45 per MWh this week (the equivalent of $15 per mmBtu), after Austria’s energy company OMV announced it would enforce the arbitrage award of $240 million against Russia’s Gazprom and not pay for delivered gas volumes.

E&P Markets Jittery on Exxon’s Angola Prospect. US oil major ExxonMobil (NYSE:XOM) started drilling its Arcturus-1 exploration well in Angola’s untapped Namibe basin in late July with the drill ship Valaris DS-9 coming off location in late October, however it is still yet to announce anything, fueling speculation that it might’ve opened a new frontier play.

Surging Ethanol Output in U.S. Lifts Stocks. US ethanol production rose to an all-time high in the week ended 8 November, reaching 1.11 million b/d and marking a 6.3% year-over-year increase, as the current oversupply boosted U.S. inventories that jumped to 22 million barrels, with a particularly robust jump in U.S. Gulf stocks.

Oil Majors to Finance Energy Access Improvements. Europe’s leading oil companies TotalEnergies (NYSE:TTE), Shell (LON:SHEL), BP (NYSE:BP) and Equinor (NYSE:EQNR) have committed to a joint $500 million fund to improve universal energy access in sub-Saharan Africa and Southeast Asia over the coming years, as part of their COP29 climate pledges.

Beijing Slashes Export Tax Rebates. China finance Ministry announced in a surprise move that it would scrap or reduce export tax rebates for a wide range of commodities, cancelling the rebate altogether for aluminum and copper products whilst oil products would see a cut from 13% to 9%.

Mali Detainment of Mining Firm Executive Turns Ugly. The military junta in Mali has detained the chief executive and two other employees of Australian mining firm Resolute Mining (ASX:RSG), demanding $160 million from the company for their release as they insist the miner did not pay its share of back taxes at its Syama gold mine in the country.






Trump’s victory triggered significant rallies in certain asset classes, led by Bitcoin, which surged to a new all-time high as renewed optimism in digital assets drew investors to cryptocurrencies. US equities also reacted positively, with small-cap stocks outperforming as investor optimism favoured growth-focused domestic assets. This highlights optimism in sectors more closely tied to the US economy, reflecting expectations that Trump’s policies could favour domestic industries.

In contrast, traditional safe-haven assets such as gold, crude oil and emerging market (EM) equities saw declines. Gold faced selling pressure as investors reallocated toward higher-risk assets expected to benefit from potential growth-friendly policies. Crude oil’s decline mirrors similar investor shifts. Chinese and European equities also underperformed, a sign of apprehension over potential trade realignments and economic impacts stemming from renewed US policies.



Trump’s election victory triggered a post-election wave of euphoria in the crypto market, led by high-profile coins like Bitcoin and Dogecoin, which captured much of the spotlight as investors redirected funds towards these major assets. This shift toward major coins had been developing since early 2023, driven by a cooling crypto market and regulatory shifts, such as the SEC's approval of spot Bitcoin ETFs.

Historically, altcoins have been highly volatile and even occasionally outperformed major coins, as seen during the 2022 crypto rally. But the trend reversed in 2023, as broader market slowdowns and changing investor sentiment favoured more established cryptocurrencies. Trump’s re-election further amplified this trend, with major coins reacting more strongly than altcoins in the recent post-election rally.



Trump’s decisive victory removed a major source of uncertainty from the stock market, resulting in a drop in the VIX index, a.k.a. the market’s "fear gauge." Last Thursday, the VIX dropped to 15.20 and has since fallen further, dipping below 15, indicating reduced risk perceptions among equity investors. The MOVE Index provides a complementary view, showing how both equity and bond market investors are adjusting their expectations in the post-election environment.




The end of the Bretton Woods system in the 1970s marked the start of a more market-driven exchange rate era. During this period, trade liberalization expanded, particularly in emerging markets where trade barriers were gradually lowered. These developments fostered greater economic integration, leading to a steady rise in global trade openness and annual trade growth rates averaging around 10%.

However, since the GFC, trade reforms have slowed, influenced by US-China trade tensions and other geopolitical conflicts. This has led to increased regionalization and slower growth – a phenomenon often referred to as “slowbalization.” The trend reflects a move away from rapid globalization toward more regionally focused trade networks, with global trade openness stagnating and trade growth slowing since 2018.



The week:



Pretty ugly actually.

What if,

There is no gold at Ft. Knox?

The thing is that with the rest of the world re-monetising gold, revaluing gold higher helps everyone. With the stroke of a pen the debt issue is solved. Everyone is supportive as it helps them also.

Yet the US actively tries to suppress the POG and is now actively trying to monetise BTC which only works if others (sovereign governments) hold BTC, which they likely don't. At least not in any worthwhile size.

We know JPM holds the physical gold attached to the GLD ETF and will simply steal that if necessary, but that's a long way short of the 8000 tons supposed to be held at Ft. Knox.

Interesting.

Meanwhile the inevitable recession, put off through endless strategems via the complicity of the Fed draws ever closer. Disaster is an arithmetical certainty under the laws of compounding.

At some point, someone makes a rush for the door. Buffett is already exiting (exited) and others will be sure to follow. Confidence is a funny thing. The speed of a crash will be so much faster now. Look at August. It only lasted 1 day but it was panic for a couple of hours. If the bleeding cannot be halted, huge losses will blow up Hedge Funds which underpin the UST market.

Normally or in the past, market tops tended to be a bit of a drawn out affair and if you knew what to look for, you could get out mostly whole. 2020 was an example of the newer faster bear.

The problem will be that cutting rates will not work this time. They are cutting the short end currently, yet the long end continues to rise. That is not supposed to happen. There is no Balance Sheet large enough to soak up the supply currently. Gradually it is entering a death spiral where the Fed will have to step in and outright print.

jog on
duc

 

[ducati916]

BTC



jog on
duc

 

[qldfrog]

A sea of red today.... everything even btc pms....

 

[divs4ever]

POO rises, UST market blows up as there is a rush to obtain USD.

MAYBE this time it is actually different , you can buy oil in other currencies ( if you plan to take delivery )

some of these sources also offer long term supply contracts

will it be different to any significant degree , $6x oil puts some major producers in the unprofitable area so supply may actually tighten , no matter how much regulations are slashed

but something is still seriously wrong with the status quo , ... soft landing or hard impact ( or has it already broken while we have been distracted ) ?

interesting times ( challenges but also opportunity )

 

[divs4ever]

BTC



jog on
duc

yes , once you start leveraging and derivatives on a product it is the kiss of doom

 

[ducati916]

Space and Rockets:

Space Stocks Are Mooning

If you’ve been following along, you already know. We want our offense on the field. We’re going long.For baseball folks, we’re putting the pinch hitter in. We’re looking to go yard.Welcome to the growth chronicles.Over the coming weeks, I’ll be doing a series of posts on the most risk-on areas...

www.stockmarkettv.com

​

​ The Health Care Sector ($XLV) dropped -5.5% this week, marking its worst week in four years. It's now the weakest sector YTD (+5.2%) and the only negative sector QTD (-6.2%). Donovan points out that $XLV is testing the 2022 highs, around $140. Relapsing into this multi-year range would be a major setback for the fourth-largest sector of the S&P 500. The largest stocks in $XLV and their weightings are: 1.) $LLY - Eli Lilly & Co. (11.7%) 2.) $UNH - UnitedHealth Group (10.3%) 3.) $JNJ - Jonson & Johnson (6.9%) 4.) $ABBV - AbbVie Inc. (5.7%) 5.) $MRK - Merck & Co. ( 4.7%) The Takeaway: The Health Care Sector ($XLV) is testing a critical level around $140 after retracing its entire breakout from earlier this year. Losing this level would be a major setback for the fourth-largest sector of the S&P 500.

​

​

All of that pales into nothing when this:



This is AUSTERITY.

Which can be a good thing or a very bad thing.

With a highly indebted government, austerity without restructuring the debt first is VERY BAD.

If 'they' restructure the debt first, then austerity will be ultimately a good thing.

So what does it look like if they cut spending before restructuring the debt?
It looks like this:



USD higher = everything else lower.



A rise in POO exacerbates that effect.



As I have previously stated, Trump is trying to play Reagan's game of the early 1980's. Conditions are radically different this time. The US NIIP = (-70%+). That cannot work if Trump tries to play Reagan's blueprint. Ignoring the NIIP for a moment, China et al can buy commodities in their own currencies. Massive change in circumstances, which has really significant implications for the US.

Trump needs a weaker USD. How weak? How about USD = 70. That is lower by 36. A 33% devaluation.

Markets could become really volatile into next year and the change in administrations unless the Biden administration or the Fed act to bring the USD down now.

jog on
duc