DJIA, NYSE, S&P = CRASH!!!

[presence]

 

[Zippyjuan]

China market up today (2%), US market fairly flat so far on the day- strong jobs report for December raised possibility that the Fed may continue to raise interest rates.

China closes 2% higher but other markets fall after US jobs data

Investors have been buoyed by the People’s Bank of China’s decision to boost the yuan for the first time in nine days. US jobs showed stronger than expected growth, prompting rate hike talk

US adds 292,000 jobs in December
European stocks are rallying a little
Chinese market recovers
Nerves settled as China bolsters yuan

 

[The Gold Standard]

Dead cat bounce.

 

[presence]

China Halts Trading as Stocks Tumble 7 Percent in 29 Minutes
http://www.nytimes.com/2016/01/08/business/dealbook/china-shanghai-stocks-fall.html?_r=0

 

[presence]

The start of the new year has been nothing short of dreadful for the global markets, due to a "when it rains, it pours" convergence of geopolitical, macroeconomic and commodity risks. It's a storm headlined by the complete and utter structural breakdown in the Chinese markets, which has sent vicious shock waves across each and every global market.

http://www.thestreet.com/story/1341...s-market-s-volatility-and-how-to-play-it.html

 

[Zippyjuan]

China Halts Trading as Stocks Tumble 7 Percent in 29 Minutes
http://www.nytimes.com/2016/01/08/business/dealbook/china-shanghai-stocks-fall.html?_r=0

That was two day ago. Market up 2% today.

 

[presence]

That was two day ago. Market up 2% today.

 

[angelatc]

Stop posting this! Dear Leader wants us to celebrate the creation of the low-paying jobs !

Seriously, the market is overinflated because interest rates are too low. Still. Obviously we need to raise the minimum wage.

 

[presence]

 

[Zippyjuan]

Cheap oil prices are putting a lot of pressure on countries who rely on oil for a large part of their revenues- like Russia and Venezuela and Mexico and Brazil and even Saudi Arabia- though they are better able to afford it than the other countries on that list.

https://www.rt.com/business/328432-crude-price-swings-russian-economy/

According to Russian Economic Development Minister Aleksey Ulyukaev, $40 oil doesn’t threaten the stability of Russia's economy, but won’t allow GDP, production and consumer demand to turn positive.

He expects volatility in oil prices in the first half of 2016. However, $50-55 per barrel in the next year seems realistic, Ulyukaev added.

Russian Finance Minister Anton Siluanov said that 2016 will be decisive for oil. According to him, a lot of oil producers will be unable to sustain $40 oil and will be forced to cut production to stabilize the price.

“Everyone is playing for himself. Saudi Arabia is cutting prices. Iran is returning to the oil market. We have to live through this difficult year,” said Siluanov.

Russia expects to get 3,165 rubles per each barrel of exported oil. With Brent at $40 and ruble at 70 per dollar, the Russian economy will lose about 350 rubles, or $4-5 on every barrel. To cover this deficit, the Finance Ministry may be forced to turn to the Reserve Fund.

In October, Siluanov said that 2016 could be the last year for the Russia's Reserve Fund. The country will have to switch to the National Welfare Fund that could significantly reduce by 2018.

The Reserve Fund and National Welfare Fund are part of the international reserves of Russia. The country's reserves as of December 1, 2015, stood at $369.7 billion according to the Central Bank of Russia.

If prices stay this low for a couple of more years, Russia may run out of financial reserves.

 

[fatjohn]

Interesting. Those reserves are treasuries right?
China also in need to sell them.

Also with everybody and their mom shouting that they expect 1x dollar oil it is clear to me that 1) this trade is getting crowded. 2) these prices are unsustainable for mahjor players if one has a long term horizon. Petrobras is close to dying for example.

What is a good way to expose yourself? Exxon, chevron and conocophilips havent fallen much. Shell and total a bit more. Gazprom and petrobras have been annihilated but at least petrobras could go belly up.

 

[KingNothing]

So, low oil prices are bad now?

 

[KingNothing]

"OH MY GOD, THE WORLD IS GOING TO END TODAY!" - This thread, every day.

Eventually the market will fall, and hard, and the doomsday folks will say "see, I told you!" as if market booms and busts aren't regular occurrences.

 

[devil21]

So, low oil prices are bad now?

Bad for petrodollar standard, yes.

 

[Zippyjuan]

Interesting. Those reserves are treasuries right?
China also in need to sell them.

Also with everybody and their mom shouting that they expect 1x dollar oil it is clear to me that 1) this trade is getting crowded. 2) these prices are unsustainable for mahjor players if one has a long term horizon. Petrobras is close to dying for example.

What is a good way to expose yourself? Exxon, chevron and conocophilips havent fallen much. Shell and total a bit more. Gazprom and petrobras have been annihilated but at least petrobras could go belly up.

The fund is invested in "low yield foreign securities" of which 45% are said to be US securities- along with 45% in Euro investments and the remaining 10% in UK Pounds. They are held in foreign currency to protect against currency fluctuations of the Ruble.

https://en.wikipedia.org/wiki/Stabilization_Fund_of_the_Russian_Federation

In December the fund was reported to be worth $49.2 billion which would mean about $20 billion in US securities in that fund. They hold Treasuries in other funds too- as of October, about $80 billion worth in total. http://www.reuters.com/article/russia-budget-idUSR4N13Q02D20151210

 

[Zippyjuan]

So, low oil prices are bad now?

Bad for the producer of oil and the companies who supply them. As well as the governments who rely on oil revenues to pay their bills (like Alaska in the US or Russia, Venezuela, Mexico, and Brazil- Saudi Arabia is said to have enough excess cash to be able to hold out for five more years at current prices- some think they are trying to drive other producers out- such as US fracking companies which need about $60 a barrel to be economically feasable- to gain more market share for themselves in the future).

 

[KingNothing]

Bad for the producer of oil and the companies who supply them. As well as the governments who rely on oil revenues to pay their bills (like Alaska in the US or Russia, Venezuela, Mexico, and Brazil- Saudi Arabia is said to have enough excess cash to be able to hold out for five more years at current prices- some think they are trying to drive other producers out- such as US fracking companies which need about $60 a barrel to be economically feasable- to gain more market share for themselves in the future).

Right but there is no universal good or bad. "OH MY GOD, OIL PRICES DROPPED!" also means that other industries benefit from the small increase in disposable income of consumers, the lower cost to transport goods, and cheaper travel. Some companies and countries gain, others lose. This obviously isn't directed at you. You're smart. It's the others that don't really seem to grasp this.

And what do people who harp about the petrodollar being impacted by this want? When oil prices rise it is "OH MY GOD, OIL PRICES ROSE!" and the dollar and all of western society is at risk.

Give it up already. You don't know what is going to happen. No one does. All you can hope for is that governments, the Fed, and corporations react in a measured manner and never do anything dramatic, and that you can spot a market inefficiency or two for some investments to go along with your basket of stocks/funds/commodities/bonds/etc

 

[ILUVRP]

i have said many times on this forum crude oil should be around $40/ba and gasoline around $1.70/ga , now over 200 million drivers are getting a break as are farmers/truckers and our defense dept .

everything w/o outside forces will reach equilibrium , now would be a good time for our goverment to buy crude and store it as they were when oil was 80-100/ba.

the low prices will also slow down money given to the bad guys of the world , isis has control of 40% of iraq oil , bomb their oil fields and not the trucks .

 

[Zippyjuan]

http://money.cnn.com/2016/01/14/investing/stocks-dow-jumps-200-points/

Dow jumps 228 points. Best day since early December

Maybe the financial world isn't coming to an end after all.

After the worst start to a year and falling into a correction, the stock market finally showed signs of life.

The Dow jumped 228 points on Thursday, its best day since early December. The S&P 500 advanced 1.7%, while the Nasdaq rose 2%.

The gains were fueled by financial markets in China calming down, a slight gain in beaten-down crude oil prices and hopes the Federal Reserve may delay its plans to raise interest rates further. Market analysts said a rebound was bound to happen eventually as pessimism about stocks got too extreme.

"You had a very oversold market. It was a pretty sharp, unrelenting move lower. It's hard to know if this will stick, but it's a breath of fresh air after a terrible start to the year," said Art Hogan, chief market strategist at Wunderlich Securities.

 

[dannno]

http://money.cnn.com/2016/01/14/investing/stocks-dow-jumps-200-points/