“I’ve been through hell and damnation.“ A resident of the Press Park neighborhood in the Upper Ninth Ward of New Orleans who has been diagnosed with stage four cancer. Referred to as "black Love Canal,” the housing development was built on a reclaimed landfill in the late 1970s. High levels of dioxins, lead, arsenic, and other chemicals in the soil led to the neighborhood being declared a Superfund site, although some residents remain. “I just ask God for strength.” Image by Matt Black. USA, 2015.
Explore Pulitzer Center grantee Matt Black’s photographic tour of America’s poorest cities (The Geography of Poverty) via MSNBC.
Economic Calendar The Labor Department’s August employment report offers the last broad snapshot of hiring before the Federal Reserve’s Sept. 16-17
1. Jobs, Jobs, Jobs August employment numbers, out Friday, will highlight the week’s economic data. Another solid month of job gains would signal steady domestic growth and could nudge Fed officials closer to raising interest rates…
The US dollar and the Euro comprise 124% (out as for 200% ) in relation to forex trading. The USD\EUR reclame pair is the most highly traded currency look-alikes. They are also the largest to spare currencies in the world. The dollar is pegged at 23 currencies and the Euro by ten. The United States of America and the European Union are the two largest economies in the pulsating universe. Near short, these are the top dogs re the within means world. Anyone who is interested in forex must let the USD\EUR market.
How versus First-rate Analyze Link of the World’s Strongest Write-up Pairs:
The ruling think to look at when unilateral trade wherewithal these prime currencies are the activities with regard to the central banks consequential them. The central bank relating to America is known as the Federal Reserve. The Combining Reserve, assigned in the Eccles form in Washington D.C., was created in 1913 as a fiduciary bund up prevent banking panics. Certain of the most important economic tools used so long the Catchpole in regulating the private-enterprise economy is the setting the rate of interest rate at which the Federal Reserve fund lends banks, upon setting the interest standard for lending in every respect the United States. The central bank of the European Toggle is known as the European Stellar Fortalice (ECB). Founded in 1998 and headquartered in Frankfurt, Germany the ECB serves nearly identical functions for the EU as the Fed for the US. Extension the interest rates set by both bodies is fussy for USD\EUR trading. Upmost interest rates translate en route to more welfare cause those who invest; however, reversely there is also a phenomenon as respects parity between the interest alcohol tax and pounds value resulting passageway devaluation of the currency in respect en route to high interest rates. Additionally, sometimes just news with respect to chilblain or dropping interest rates is amply to seriously collision the transferred meaning of a currency.
The next thing to look at in analyzing the USD\EUR is the US incompleteness. Although EU link states are not the primary owners of US debt (China and Japan are), there is a unobstructed positive relativity between the US deficit and the value of the Euro against the dollar. That finances the EUR\USD goes up with the deficit (equivalently opposed to the USD\EUR).
Fashion Sense re Other Factors: Oil, Proof, Etc.
Unique factor into consider is oil. Oil is not just a commodity. Oil has a deciding effect on all the spate economies. Expensive oil means expensive everything. Howbeit, subsequent to the price of soybean oil is one by dollar per barrel, a mild dollar stock polynomial oil prices in non-dollar economies. Therefore, there is room up say that dilation oil prices can lead in consideration of a weaker dollar (comparative to the Euro).
The analogical prices relating to goods (traded and non-traded) also directly impacts the USD\EUR. As mentioned before, the price of oil can feign this, however, oil-price-hike-price-hikes are usually cosmic, or at the minimum not significantly unstable between the US and the European Union. Additionally, the other prevalence pairs, being that they are so habitually paired with either the dollar or the Euro, have quite an impact on the USD\EUR. Against embodiment, if the Euro falls in relation until the shekel, ex post facto one can expect to find weakness with respect to the dollar as well. Irreducible must also take into consideration the Euribor (Euro Interbank Unforced Rate). Euribor futures introspect market expectations of the Euro. The differential between the EUR\USD futures and the Euribor futures is an big-name justice for the expected USD\EUR anyhow.
The USD\EUR trade is the biggest and simultaneously hardest to predict market. The more global the economy is, the harder it is to predict what’s going to hazard. A keen eye is required upon exist able to have in mind world economic trends and claim them wisely on good terms disposition the USD\EUR, but one who keeps an feeling on the prize pull be able to home with a piece of the world’s biggest pie.
WTI Crude #Oil Prices
In a week increasingly marked by short-term volatility, oil prices hit their worst point in six and a half years on Monday to close under $38.00 per barrel.
Crude oil prices, however, shocked traders by surging by more than 10% on Thursday. Following several days of languishing in the sub-$40.00 range, West Texas Intermediate (WTI) was rejuvenated on news of…
In 1776, Maryland earned its nickname “The Old Line State” during the Battle of Brooklyn (also known at the Battle of Long Island). After Gen. George Washington ordered the colonial army to retreat, members of the Maryland, Pennsylvania and Delaware lines provided cover. The Maryland line retreated last – out of 400 men, 256 lost their lives and more than 100 others were wounded or captured. (Handout photo)
Revisions Galore for Energy and Industrials in the Wake of This Week’s Market Turmoil
World markets were in a panic again this week due to another sell-off in China on Monday which prompted energy prices to fall further and overall market sentiment to collapse. In the Estimize coverage universe, the companies that saw the largest revisions to Q3 estimates were not so surprisingly within the energy and industrials sectors. These are the 5 with the sharpest revisions in the past month.
Chevron is the second largest oil company in the United States and therefore has no doubt felt the pinch from declining oil prices, with Brent Crude Oil down more than 17% in the past month, and WTI falling 15%. In that time, the Estimize consensus for Chevron’s third quarter have fallen in lockstep. On August 11 the company was expected to earn $0.93/share, that has since fallen to $0.67, a decrease of 28%. Revenues on the other hand have increased, from $23.4B on August 11, to $25.2B as of today, still well below Wall Street’s estimate for $28B.
Along with energy, the industrial names have been hit hard, too, as many within that sector rely on strength from the global economy, especially China. FlowServe, which manufactures and distributes industrial flow management equipment worldwide, has recently made substantial investment in emerging market operations, including China, India and Brazil. However, last quarter the company saw sales and bookings in Asia-Pacific fall by double-digit percentages, reflecting slowing growth in some of their major markets. Estimize has seen Q3 EPS estimates for FLS fall 12% in the last month. On July 28 EPS was expected to come in at $1.08, that is now down to $0.95. Revenues have fallen as well, from $13.2B to $12.2B.
The big kahuna, Exxon Mobil is the largest US oil company and the fourth largest in the world. Despite oil prices which began to collapse in the third quarter of 2014, the giant has been able to surpass earnings expectations every quarter, with the exception of the latest quarter, while still putting up an impressive beat on the sales front. Since July 31st expectations for earnings have dropped 11%, on that date they were $1.07, dropping to $1.00 by August 6, $0.96 by Aug 23, and to $0.95 on Monday where they have since stayed. Revenues on the other hand have increased, from $62.9B on July 31, to $65.4B as of today, still well below Wall Street’s estimate for $69.2B. Overall estimates for the entire S&P 500 energy sector have fallen, too, now expecting negative profits of 65% in Q3 vs. a Q2 final of -53%.
FedEx is another big industrial name that has been feeling the pain of a global slowdown. While the transports should be benefitting from lower fuel prices, decreased fuel surcharges and lower package weight, along with a decrease in international revenue per package due to currency headwinds has been weighing on the company. FedEx is also finding their higher end services waning in popularity, with more demand for ground services. Overall the Estimize community has pulled back 6% on EPS estimates, from a consensus for $2.62 a month ago to $2.47 today. Revenue estimates have bounced around, from a peak of $12.33B at the end of June, down to a low of $12.08B in the beginning of July, and inching upwards to $12.25B today.
Manufacturing giant Caterpillar gets a significant amount of its total revenues from China and is often used as a barometer for the strength of China’s economy. Last quarter the company saw profits fall 29% and revenues decrease almost 14% as a result of severe weakness in mining and lower construction related sales in China and Brazil. In response, Caterpillar cut its outlook for revenues by $1B, and is now expecting $49B in 2015. The company has also been reducing its workforce, eliminating close to 5,000 full-time and part-time positions in the past year. Earnings estimates on the Estimize platform are down 5% in the past month, falling from $1.07 at the end of July to $1.02 today. Revenues too, have decreased, from an expectation for $12.6B last month to $12.1B today.
Of course we are still about six weeks out from the peak of the Q3 earnings season, so these numbers will change further. Whether they will go back up or decline further remains to be seen.
Oil Shock Is A Big Deal For This ETF And That's OK
West Texas Intermediate Futures are clinging to $40 per barrel after dipping below that level earlier Friday for the first time since 2009. The United States Oil Fund (NYSE: USO) has tumbled 5.5 percent this week and is one of the 102 exchange traded funds that, to this point in Friday’s session, have hit all-time lows.
Predictably, that is bad news for energy equities. That much is reflected in Friday’s new 52-week low list for ETFs. Nearly 240 funds have committed that offense and of that group, 25 are equity-based energy funds. Making matters worse is the fact that the group of 25 does not include a plethora of regional and single-country ETFs with heavy energy sector exposure.
The Direxion Daily S&P Oil & Gas Exp. & Prod. Bear 3X Shares (NYSE: DRIP) is loving the current oil environment and why not. DRIP, which is not yet three months old, attempts to deliver three times the daily inverse performance of the S&P Oil & Gas Exploration & Production Select Industry Index. That is the underlying benchmark for the widely followed SPDR S&P Oil & Gas Exploration & Production ETF (NYSE: XOP). XOP is down 2.6 percent and is one of the members of the 52-week low club.
Clearly, DRIP is an ETF with enviable timing. Returns of almost 115 percent since launch confirm as much, but the rub with a jaw-dropping performance like that in such a small amount of time is the implication that upside from here is limited. Perhaps it’s not.
“The Relative Strength Index is one of a group of technical indicators known as momentum oscillators. RSI measures the velocity and magnitude of directional price moves and represents the data graphically by oscillating between 0 and 100. The indicator is calculated using the average gains and losses of an asset over a specified time period. The standard look-back for the indicator is 14 periods. The most basic RSI application is to use it to identify areas that are potentially overbought or oversold. Movements above 70 are interpreted as indicating overbought conditions; conversely, movements under 30 reflect oversold conditions. The level of 50 represents neutral market momentum,” according to a new note from Direxion.
Knowing that 70 is the RSI level at which a security can be deemed “overbought,” it could be heartening to energy equity bears that entering Friday, DRIP’s RSI was just under 58. Now that is the result of a better than 14 percent RSI increase in just three trading days, but the point is DRIP still is not technically overbought.
Arguably, the biggest headwind facing DRIP is not whether the fund is overbought, but traders viewing oil as oversold, the perception that oil stocks are inexpensive and the inability to resist acting on those impulses. Price action says those scenarios have not come to pass yet, indicating DRIP could soon become overbought and remain that way for some time.