Oil companies have a knack for picking the bottom in crude prices, and history may be about to repeat itself.
Traders and analysts are speculating that Royal Dutch Shell Plc’s takeover of BG Group Plc for US$70 billion announced Wednesday may be the first in a wave of acquisitions as Big Oil seeks to drive out costs following the rout in oil.
As noted in German Two-Year Bonds Have Negative Yield, Demand High; Euro Bond Bubble Guaranteed to Burst, " Banks lend (provided they are not capital impaired), when credit-worthy borrowers want credit and banks perceive risks worth lending."So which is it, lack of credit-worthy borrowers or capital impairment. The answer is likely both, but the spotlight goes on capital impairment, and Texas Ratios, a the ratio pf bad loans to equity.
The major currencies continue to trade in fairly narrow ranges. The persistence of lackluster activity renders our trend identification, momentum, and positioning tools less useful. The ECB meeting in the week ahead may be a window of opportunity for more activity. Yet, neither the threat of asset purchases and/or a negative deposit rate nor heightened tensions over Ukraine, or a re-acceleration of the US economy have seemingly provided new trading incentives.
By Dr. Duru: In early October, I ended the trade in Skullcandy (SKUL) playing a bounceback from Morgan Stanley's devastating downgrade, but noted I would remain a buyer on dips (see "Skullcandy Recovers Losses From Downgrade - Now Comes The Tougher Part").
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608 days since last 10% correction
As of Friday’s close the S&P futures [ESH14] have rallied 62 handles in nineteen hours and 15 minutes in approximately 3 trading days, closing up +2.6% in two days and closing out the week with its first weekly gain in four weeks. The S&P took Friday’s bad news of a lower-than-expected jobs number and made good of it. The S&P closed out the two-day rally with its best two-day gain in four months.