Lots of interesting stuff presented during the Bloomberg pre-market "Surveillance" progeram this moning. Jonathan Ferro commented on the above set of numbers, showing changes year-to-date for three crucial indicators. Brent crude has risen 80% this year, and the yield on the 10-year treasuries has increased by 85 basis points. So there has been an energy shock and an interest rate shock, but despite those factors, the broad market measured by the S&P 500 is up double digits. Some discussion thereafter by Lisa Abramowicz and Annmarie Hordern re how the markets have been resilient because of demonstrably increased profits and the expectations of future growth based on potential contributions of artificial intelligence, into which segment of the market vast quantities of capital have been pouring. None of this is "new" today but it is startling to see it combined into one graphic.
Even more interesting IMHO was a prolonged interview with Stephen Schork, a a former floor trader on the New York Mercantile Exchange and the editor of an oil market newsletter. His commentary runs from the 17:30 mark to the 24:00 mark of the program this morning. I'll try to have the video embed start with his comments; if it doesn't, you can mouse to that point or click this link.
It seems to me that financial markets around the world are still considering the Trump/Netanyahu "not exactly a war" situation to be a temporary matter that will resolve soon. My crystal ball does not suggest the same. Strategic petroleum reserves around the world have been depleted severely by the lack of timely shipments from the gulf for most of this year. China is already resuming purchases of crude after being out of the market during the higher prices. And now the Houthis are creating massive problems for Saudi Arabia, impairing the east-west pipeline and blocking transport east from the Red Sea, to the extent that I think the Saudis are now telling European countries that they cannot guarantee to provide oil - just when the colder weather starts to hit Europe.
This is a massive clusterfuck, and it's not getting better anytime soon.
No comments:
Post a Comment