Home > July 2017 > July 11, 2017 When will this Bubble Pop?

July 11, 2017 When will this Bubble Pop?

July 11th, 2017

As we all sit around for Yellen’s Testimony, this Bear (which is so hard to admit at markets sitting near or at all time highs), ponders when will the Bubble that was started with the China Govt flooding China, then filtering through out the world with stimulus money ever pop? Tonight Gold and Silver continue to slide down, while Oil actually pushed up over talk of Caps coming from Africa. In the first hour of the European Session we have futures up about .10%. Earnings today is Pepsi and AIR fwiw. On our local news I am seeing stories about developers are building a lot of new housing developments.  China auto sales came in stronger, which is SO SURPRISING. (edit note* I fell asleep while I was writing this blog so I corrected the incomplete thoughts. Also, China Auto Sales rise appears to be due to Price Cuts at the dealerships).

July 2017

  • panther341

    Oil: we also had the Saudis who over-pumped for the first time. But some of that might have been for internal consumption which is higher in summer – this is not clear, or at least not to me LOL https://www.bloomberg.com/news/articles/2017-07-11/saudi-arabia-is-said-to-exceed-oil-production-cap-for-first-time

  • Trading_Nymph

    Hi Panther!! Might have been cuz they saw Chinese were buying more cars lol. Such a Global Oil Glut…they have really made a mess of everything because everyone was expecting massive economic activity after central bankers threw everything at the problem, lol.

  • Trading_Nymph

    Found the reason for the strenght in Auto Sales from China…per Reuters…The rise in sales, which industry insiders said was helped by hefty discounting, lends a sheen to the world’s largest auto market, but growth overall is struggling to keep pace with 2016 when the market grew at its fastest pace in three years.

    Overall vehicle demand in China would likely grow just 1-4 percent this year, mainly because consumers made purchases last year to benefit from lower tax rates, said Yale Zhang, head of Shanghai-based consultancy Automotive Foresight

  • Trading_Nymph

    Yet, US Auto Sales finally is seeing the Rental Car Companies not coming to the party like they have been since 2009 http://www.marketwatch.com/story/us-car-sales-fall-sharply-in-june-as-prices-rise-2017-07-03-134852050

  • Trading_Nymph
  • panther341

    Bank of Canada could raise rates tomorrow – which will move gold whether they do or don’t. down if they do, up if they don’t. that’s my guess.

  • panther341

    Jamie Dimon speaking today on the Fed unwind of its balance sheet. The bears should like what he says. http://www.marketwatch.com/story/jamie-dimon-says-qe-unwind-could-catch-investors-by-surprise-2017-07-11

  • Trading_Nymph

    Yes we do…but IMHO China unwinding their heavy liquidity is a greater problem.

  • Trading_Nymph

    But Panther IMHO it is so well known already, along with a neutral statement, I doubt it will even have an effect?

  • Trading_Nymph

    China’s central bank resumes reverse repos to support liquidity
    Xinhua | Updated: 2017-07-11 14:49
    BEIJING — China’s central bank Tuesday resumed open market operations after a 12 trading-day suspension, in a move to supplement market liquidity.

    The People’s Bank of China (PBOC) pumped 40 billion yuan ($5.9 billion) into the financial system through reverse repos, according to a PBOC statement.

    The operation offset maturing reverse repos that will drain the same amount of liquidity from the market Tuesday.

    The central bank had attributed the previous suspension to “relatively high” liquidity in the banking system before describing the liquidity as moderate on Monday.

    Altogether 280 billion yuan of reverse repos and 179.5 billion yuan of medium-term lending facility loans are due to mature this week, putting pressure on market liquidity.

    In Tuesday’s interbank market, the overnight Shanghai Interbank Offered Rate, which measures the cost at which banks lend to one another, rose 1.6 basis points to 2.549 percent.

    China set the tone of its monetary policy in 2017 as prudent and neutral, keeping an appropriate liquidity level but avoiding excessive liquidity injections.

    The central bank has tried to strike a balance between financial deleveraging, aimed at defusing risks, and shoring up economic growth.

    Growth of China’s broad measure of money supply, M2, hit a record low in May. But authorities have been careful not to squeeze liquidity too much, to avoid dampening demand.

    Early in June, the PBOC increased cash injections into the banking system to meet spiking liquidity demand typically seen in the middle of the year due to seasonal factors such as regulatory reviews and tax payments.

  • Trading_Nymph

    API was a big surprise, EIA has a big shoe to fill tomorrow…Crude inventories fell by 8.1 million barrels in the week to July 7 to 495.6 million, compared with analysts’ expectations for a decrease of 2.9 million barrels. Crude stocks at the Cushing, Oklahoma, delivery hub fell by 2 million barrels, API said.

    Benchmark Brent LCOc1 futures rose 64 cents, or 1.4 percent, to settle at $47.52 a barrel. U.S. West Texas Intermediate crude CLc1 also rose 64 cents, or 1.4 percent, to settle at $45.04 per barrel.

    After the close and the supportive API data, Benchmark Brent LCOc1 futures rose $1.25, or 2.7 percent, to $48.12 a barrel. U.S. West Texas Intermediate crude CLc1 rose $1.31, or 2.9 percent, to settle at $45.71 per barrel.

  • panther341

    It has been so long since interest rates affected anything – peeps on twitter and elsewhere making fun of “senior” analysts who look like they have never seen rising interest rates. Interest rates are even a part of the calculation in the Black Scholes model for options pricing but for the last 9-10 years it was a part of options pricing that could be ignored.

    I don’t know if it is already priced in. It could be.