If you haven't been paying attention to the gold (NYMEX:GC.Z16.E) market, you may have missed one of the most interesting moves of the year. As all the major indices have been trending lower gold has been doing just the reverse.
Here are the three positive indicators I see.
Continue reading "Three Indicators That Say Gold Is Headed Higher"
Chinese policymakers are in the midst of a very delicate maneuver. With a hyped housing market and an unloved stock market, China’s policymakers want the “hot money” from real estate investment to be funneled away from housing and into the stock market. The problem? It won’t be easy and may require sacrificing economic growth, just at the point when growth has begun to stabilize.
For some time now, Beijing has been well aware of the bubbly housing market. In fact, China has experienced two housing slumps in past decade, back in 2011-2012 and in 2014-2015, in both cases, the slump was largely due to the government’s efforts to curb prices in the preceding years. Those efforts were primarily through the implementation of new housing regulations and by clamping down on shadow lending. More importantly, the Chinese government put to good use its main monetary tool, the Yuan. By allowing the Yuan to strengthen, credit became more expensive and, as a result, the hype ended. But the price tag was dear because tightening efforts also resulted in a sharp slowdown in the Chinese economy and a meltdown in the Chinese stock market.
In 2015, the crisis was so severe, in fact, that Chinese policymakers had no choice but to drastically reverse policy by cutting lending rates, intervening in the stock market and, yes, as you might have surmised, devaluing the Yuan. But ironically, just when the easing measures have started to make a real impact, the housing market has once again become overheated and has turned bubbly. Continue reading "Will China Drop The Ball?"
Due to drug pricing controversies, there has been much concern about how the outcome of the upcoming election will affect pharmaceutical stocks. Dr. Len Yaffe of Stoc*Doc Partners sheds light on the issues in this analysis of drug price negotiation policy, and focuses in on one California ballot proposition that aims to rein in costs.
One issue of focus in the election rhetoric is Medicare drug price negotiation, which is specifically precluded in the Medicare Modernization Act of 2003. Furthermore, a noninterference provision was included: Continue reading "Why The Election Is Not As Relevant To Drug Stocks As You Might Believe"
Hello MarketClub members everywhere. The Federal Reserve left interest rates unchanged while saying the argument for higher borrowing costs strengthened further amid accelerating inflation, reinforcing expectations for a hike in December.
"The committee judges that the case for an increase in the federal funds rate has continued to strengthen but decided, for the time being, to wait for some further evidence of continued progress toward its objectives," the FOMC said in a statement Wednesday following a two-day meeting in Washington. Fed officials confirmed their growing confidence that inflation is on track to reach their 2 percent target. The central bank said Wednesday that the pace of price gains "has increased somewhat since earlier this year" and that market-based measures of inflation compensation "have moved up." The committee also omitted previous language saying inflation would probably "remain low in the near term."
Oil continues to fall after a government report showed that U.S. crude oil inventory surged. Crude oil stockpiles rose 14.4 million barrels, or 3.1%, last week, according to the Energy Information Administration. It's the biggest gain since 2008 in percentage terms.
Key levels to watch rest of this week: Continue reading "The Fed Speaks and Oil Continues Lower"
General Electric Co. (NYSE:GE) announced a deal to combine its oil-and-gas business with Baker-Hughes, creating one of the world's largest providers of equipment, technology, and services to the oil and gas industry. Worldwide drilling activity had peaked in November 2014, the same month that Saudi Arabia had started the war for market share, which eventually caused oil prices to collapse.
As oil prices plummeted, so did the rig count. Active rigs worldwide fell from 3,670 to 1,405 in May 2016, a 62% drop. In the U.S., rigs fell from 1,930 t0 408, a 79% drop.
But as oil prices rebounded to $50/b in late May, the rout ended. Since May, active rigs rose by 25% in the U.S. and by 13% worldwide. Continue reading "GE's Timely Baker-Hughes Deal: Rigs And Oil Production Set To Rise"
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