There is always a bull market somewhere... The Sprott Uranium Trust just broke a huge resistance
Source: Tony Greer
The World’s Biggest Oil Producers
Source: Visual Capitalist
In case you missed it: now that the Fed's blackout window is over, everyone said the same thing in the days that follow the FOMC meeting: "higher for longer":
*FED'S COLLINS: FURTHER FED HIKES 'CERTAINLY NOT OFF THE TABLE', EXPECT RATES MAY HAVE TO STAY HIGHER FOR LONGER *FED's BOWMAN: MORE RATE HIKES LIKELY NEEDED TO GET INFLATION TO 2%, NEED TO REPEAT MONETARY POLICY ISN'T ON PRESET COURSE *FED'S DALY: I DON'T GET TO A POINT WHERE I'M READY TO DECLARE VICTORY, UNLIKELY INFLATION WILL REACH 2% GOAL IN 2024
The S&P 500 index dropped 2.9% over the week
That marked the third straight negative week and worst weekly performance since March. Is the Head & Shoulders pattern in the S&P 500 playing out? Source: barchart
Treasury Yields now surpass Stock Dividend Yields by the widest margin since the Global Financial Crisis
Source: Bloomberg, Bar chart
Maybe this is why Powell said that a soft landing is not the core scenario...
Recession confirmed?
JP MORGAN is making a big bullish call on oil and energy stocks.
The largest US bank expects the global oil deficit hitting a record 7mmb/d in 2030, a staggering shortfall which would require prices to rise higher... much higher. In a nutshell: JPM is reiterating their $80/bbl LT target and their view framed in Supercycle IV that the upside risk to oil is $150/bbl over the near to medium term term and $100/bbl LT. The primary drivers of their structural thesis are : 1) higher for longer rates tempering the flow of capital into new supply, 2) higher cost of equity driving elevated Cash Breakevens of >$75/bbl Brent (post buybacks) as companies return structurally more cash to shareholders, in turn, pushing the marginal cost of oil higher, 3) Institutional and policy led pressures driving an accelerated transition away from hydrocarbons and peak demand fears. Taken together, their corollary is a self-reinforcing ‘higher-for-longer’ energy macro outlook as the industry struggles to justify large investments beyond 2030. Consequently, they forecast a 1.1mbd S/D gap in 2025 widening to 7.1mbd in 2030 driven by both a robust demand outlook and limited supply sources.
The worst weekly performance since March for the sp500...
Markets like clarity and hate confusion. The first half of the year was about disinflation + AI buzz. Now the markets are not sure about what's next. And some of the confusion seems to be coming from central banks... This week we got a very confusing message from the #fed: a pause in rates, higher dot plots in 2024 but also calling a soft landing NOT a base line expectation, hence sharing fears that keeping real rates for a long period of time creates some downside risks for the economy and the markets... The combo higher inflation risk + downside growth risk is not a great value proposal for Mr Market at the time you can nicely paid by keeping your assets in money markets funds... Source chart: Bloomberg
