Glimmers of hope appearing but there could be major issues in the mortgage and energy sector
Investors left the weekend with a little more optimism that things might not be as dire as some health authorities and governments are warning. Markets across the board are doing well with these glimmers of hope.
Chris Temple joins me today to outline some of the sectors that he is still very concerned about. The mortgage and energy sectors have some new issues that Chris thinks are being largely ignored for right now.
Could the US be in for some controlled bankruptcies when this is all said and done?
Chris Temple joins me for another editorial focused on the fear in the markets and inability of central banks and governments to calm investors. On a positive note Chris is buying some things on a very selective basis taking a longer term outlook.
Energy Sector Update – Look at the yields of some of the largest energy companies
Josef Schachter joins me today to address the continued drop in energy assets including oil. The stocks are dropping as well and some of the largest companies have dividend yields of 8% and higher. I am seeing an opportunity in these stocks but it’s very important to do some digging into the financials. Josef shares what he looks for when doing his due diligence.
Safe Havens, US Markets, Bitcoin, and Energy – All Very Different Trades
Joel Elconin joins me to discuss the fear that has taken hold of the markets just this week. The economic impact of the Coronavirus will extend into Q2 of this year so the trade into safe havens should remain strong. We also look at Bitcoin that has not been moving and throws some shade on the safe haven argument at least for right now.
While we are working to get the media upload issue fixed here is a
Dropbox link to the interview. The media file will open in a new tab.
An energy market overview with a couple companies to watch in the near term
Josef Schachter wraps up today with his outdated targets and investing strategy for the energy sector. We discuss how the black swan events this month have impacted the market and changed some of his projection. Even with a lower short term outlook there are still opportunities for investors to take positions in strong companies at lower prices.
A Look At Some Of The Weaker Markets – Energy and Uranium
After Chris and I chatted yesterday focusing on some of the opportunities he sees in the market we shift our focus today to some of the more beaten down sectors. We start with a couple comments on the Fed continuing to inject money into the repo market and then quickly shift to the energy and uranium sectors. If you want to be a true contrarian then these areas should catch you eye with how low the share prices are.
Joseph Schachter, Founder of The Schachter Energy Report share his summary of the recent EIA reports for crude oil. He sends these summaries to his subscribers and shares them on Twitter. I reached out and he agreed to let me share these wit all of you.
The EIA reports for crude oil for both this and last week (I was travelling so no coverage last week) were impacted by large moves in net imports. Overall the reports were neutral. Specifically for the two weeks:
This week commercial stocks rose by 7.1Mb versus the expectation of 1.6Mb; so initially this seemed bearish.
However, in the detail the growth was due to net imports rising by 1.64Mb/d or 11.5Mb on the week surpassing the 7.1Mb rise by 4.4Mb.
Last week saw a decline of 8.6Mb and this was due to a decline in net imports by 1.36Mb/d or by 9.5Mb almost reaching the level of the decline.
Therefor these big weekly moves offset each other and are neutral.
Year to date US consumption has grown by 1.2% to 20.79Mb/d.
Today WTI is trading down 46 cents to US$56.10/b.
After trading at a rally high of US$57.88/b last week we now expect the price of crude to start declining once we get into the shoulder season.
A breach of US$54/b will start this erosion and could take oil below USW$50/b this month.
In April we should start to see the seasonal shoulder season slower demand and inventories build up. If so, we could see prices decline to below US$45/b.
A decline in oil related stocks should ensue and another great buying opportunity seen. It will be an attractive buy window but not as good as that seen during the tax loss selling season of 2018.
Energy Update – Breaking Down The OPEC and EIA Reports
Josef Schachter, Founder of the Schachter Energy Report has quickly become my go to for independent analysis on the energy sector and the underlying stocks. I bring him back on today to breakdown the OPEC and EIA reports that were released this week. With OPEC cutting production this is bullish for the oil price however some of the data in the EIA report had to temper that bullishness.