Home > November 2017, Uncategorized > Nov 22, 2017 Goldman Sachs Group Inc. lifted its forecast for U.S. stock gains in 2018

Nov 22, 2017 Goldman Sachs Group Inc. lifted its forecast for U.S. stock gains in 2018

November 22nd, 2017

Well, I like this title because if we have finally topped out, it will be my sense of amusement. Anyway, tonight the Hang Seng took out 30,000 which is 2007 high. Shanghai Futures had Copper on fire for no strong reason I could find (well there is a story floating that Nov 26 there will be a trade deal with Russia). Steel and rebar is hurting over there due to all the China Factory closings due to Pollution, but tonight Rebar was up 3%. With all this strong rally action in equities we are not seeing it all in currencies (no matter what GS says, lol). Aussie is actually weaker to the USD and Euro is surprising up .23% vs USD even with the news Merkel will have to call for a Election. Futures are up slightly around .07% in the first hour of the European Session. API came out tonight showing a massive draw of 6.356 million barrels vs estimates of 2.1 draw. Oil is  over 1% on it. EIA will be coming out today even though holiday week. Durable Goods is coming out, last month there was a huge upside surprise so Bulls are thinking it will come again and beat the low estimate of .5%. Yet, it won’t be a Big Beat so market will sell off after this silly two day rally we have had. Plus EIA can’t beat that super draw of API so Oil should give back too.Happy Thanksgiving Day. BTW, not loving the Black Friday Sales this year fwiw.

November 2017, Uncategorized

  • Trading_Nymph

    Well the consumer is above 2008 levels in debt. Maybe those credit cards won’t be working so good on Friday? From Forbes…Overall: The $13 trillion of household debt is $280 billion above its 2008 third quarter peak, and 16.2% above the 2013 second quarter trough.
    Mortgage balances: remain the highest component of household debt, comprising $8.7 trillion
    Mortgage delinquencies continued to improve, with 1.4% of mortgages 90+ days delinquent
    Student loan debt: $1.4 trillion, with 11.2% 90+ days delinquent
    Credit card balances: increased by $24 billion, with 4.6% 90+ days delinquent
    Auto loans balances: increased by $24 billion to $1.2 trillion, continuing a six year trend, while 90+ day delinquencies increased to 4%
    Auto Loans: Delinquencies Rising

    One area for concern, according to the New York Fed, is rising auto loan delinquencies to sub-prime borrowers. The New York Fed estimates that 23 million consumers hold subprime auto loans, which are based on a credit score below 620.

    Approximately 20% of new car loan originations are made to sub-prime borrowers.

    These loans were not made by traditional banks or credit unions, but by auto finance companies such as car dealers.

    While banks and credit unions typically lend to consumers with higher credit scores, subprime loans are predominantly originated by auto finance companies, which in aggregate have a 70% market share and $200 billion in loans.

    The growth in household debt can be attributed, at least in part, to the growth in auto loan balances, which have increased for 26 consecutive quarters as a result of new loan originations.

    Notably, there is a divergence in the delinquency rate between bank and credit union lenders compared with non-bank lenders.

    Auto loans from traditional bank lenders had a 4.4% 90+ days delinquency rate, and have been improving since the financial crisis.

    However, auto loans from non-bank lenders have been more than double those of traditional bank lenders – at about 9.7%.

    In aggregate, there are approximately $435 billion of auto loans outstanding that were made to consumers with a credit score below 660.

    Given its current relative size as a consumer loan segment, delinquent subprime auto loans from auto finance companies do not, on an absolute basis, meaningfully impact the overall economy.

    However, the subprime auto market is important to monitor at least in the near-term as one economic barometer.

  • Trading_Nymph

    Maybe the reason?..China says Shanghai security bloc could soon agree on free trade area
    in World Economy News 22/11/2017

    China hopes the Shanghai Cooperation Organisation (SCO) security bloc will soon be able to set up a long-mooted free trade area, a senior Chinese diplomat said on Tuesday ahead of a summit of the grouping in Russia late next week.
    China, Kazakhstan, Kyrgyzstan, Russia, Tajikistan and Uzbekistan formed the grouping in 2001 to battle threats posed by radical Islam and drug trafficking from neighbouring Afghanistan. India and Pakistan joined this year.
    The countries have discussed an SCO free trade area for years, but with little apparent progress.
    “We believe that with the efforts of all SCO members, including new members India and Pakistan, the goal of establishing an SCO free trade zone will definitely be achieved before long,” Assistant Chinese Foreign Minister Li Huilai told reporters.
    Chinese Premier Li Keqiang is attending a meeting of prime ministers of the grouping in Russia, during a trip from Nov. 26 to Dec. 2 when he will also attend a summit in Hungary of China and countries in central and eastern Europe.
    Eastern European countries have been enthusastic adopters of Chinese President Xi Jinping’s Belt and Road initiative, which aims to recreate the old Silk Road with massive infrastructure projects to connect China to Europe and beyond.
    Chinese Vice Foreign Minister Wang Chao said 13 of 16 Eastern European countries set to attend the summit had signed Belt and Road cooperation pacts and China planned to sign up the remaining three at the meeting.

  • Trading_Nymph

    EIA data..U.S. crude oil refinery inputs averaged over 16.8 million barrels per day
    during the week ending November 17, 2017, 199,000 barrels per day
    more than the previous week’s average. Refineries operated at 91.3%
    of their operable capacity last week. Gasoline production increased
    last week, averaging over 10.4 million barrels per day. Distillate fuel
    production increased last week, averaging over 5.3 million barrels per
    U.S. crude oil imports averaged about 7.9 million barrels per day last
    week, down by 25,000 barrels per day from the previous week. Over
    the last four weeks, crude oil imports averaged 7.7 million barrels per
    day, 5.3% less than the same four-week period last year. Total motor
    gasoline imports (including both finished gasoline and gasoline blending
    components) last week averaged 514,000 barrels per day. Distillate fuel
    imports averaged 190,000 barrels per day last week.
    U.S. commercial crude oil inventories (excluding those in the Strategic
    Petroleum Reserve) decreased by 1.9 million barrels from the previous
    week. At 457.1 million barrels, U.S. crude oil inventories are in the
    upper half of the average range for this time of year. Total motor gasoline
    inventories remained unchanged last week, and are in the middle of the
    average range. Finished gasoline inventories increased, while blending
    components inventories decreased last week. Distillate fuel inventories
    increased by 0.3 million barrels last week but are in the lower half of
    the average range for this time of year. Propane/propylene inventories
    decreased by 1.0 million barrels last week, and are in the lower half
    of the average range. Total commercial petroleum inventories remained
    unchanged last week.
    Total products supplied over the last four-week period averaged 20.0
    million barrels per day, up by 0.1% from the same period last year. Over
    the last four weeks, motor gasoline product supplied averaged over
    9.4 million barrels per day, up by 2.6% from the same period last year.
    Distillate fuel product supplied averaged over 4.0 million barrels per day
    over the last four weeks, up by 0.8% from the same period last year. Jet
    fuel product supplied is down 2.3% compared to the same four-week
    period last year.
    The WTI price was $56.21 per barrel on November 17, 2017, $0.54
    under last week’s price but $10.52 over a year ago. The spot price for
    conventional gasoline in the New York Harbor was $1.778 per gallon,
    $0.121 lower than last week’s price but $0.385 higher than a year ago.
    The spot price for No. 2 heating oil in the New York Harbor was $1.838
    per gallon, $0.003 over last week’s price and $0.456 above a year ago.
    The national average retail regular gasoline price decreased to $2.568
    per gallon on November 20, 2017, $0.024 under last week’s price but
    $0.413 more than a year ago. The national average retail diesel fuel price
    decreased to $2.912 per gallon, $0.003 per gallon below last week but
    $0.491 above a year ago.

  • Trading_Nymph

    Strange Panther…EIA was alot softer the API yesterday? with a much smaller decline of 1.9 million barrels in crude oil inventories. Yet Oil is up .82%, must be the Air Craft in Trouble near North Korea which is holding it up? https://www.bloomberg.com/news/articles/2017-11-22/urgent-us-navy-says-aircraft-with-11-aboard-crashed-into-pacific

  • Trading_Nymph

    Wow Durable Goods really missed estimates. Yet, these bulls are taught to buy the european close so they will try and push the market up, lol. https://www.cnbc.com/2017/11/22/us-durable-goods-orders-oct-2017.html

  • Trading_Nymph

    Baker Hughes up 9 Rigs too.

  • Trading_Nymph

    Well the Right Side of the Boat is Filled with Leveraged Hedge Funds…what could be wrong about that (well besides a slowing china)….from Bloomberg…
    10:35 AM Jamie Dimon Speaks at the Economic Club of Chicago
    Photographer: Michael Nagle/Bloomberg
    Hedge Funds Haven’t Been This Leveraged to Buy Stocks Since the Bull Market Began
    By Lu Wang
    November 22, 2017, 4:44 AM PST Updated on November 22, 2017, 7:33 AM PST
    Increasing use of borrowed money is a sign of confidence
    Managers raising longs while cutting back on short positions
    Hedge funds are borrowing more to buy equities, a sign of growing confidence in the economy and their favorite stocks.

    Leverage among managers who speculate on rising and falling shares has climbed this month to near the highest levels since the bull market began in 2009, according to data compiled by Goldman Sachs Group Inc. on its hedge fund clients.

    The increasing use of borrowed money shows that professional money managers are willing to take more risks after trailing the market for an eighth straight year. While leverage means bigger losses if stocks fall, the downside has been minimal this year, with the S&P 500 Index going longer than ever without a 3 percent drop. And nobody wants to miss out a year-end rally as the benchmark just snapped a two-week decline, touching a fresh all-time high.

    “Funds added net leverage entering the fourth quarter against a backdrop of strong economic activity, a rising equity market, and high conviction in favorite positions,” Goldman Sachs strategists led by Ben Snider and David Kostin wrote in a note.

    Growing risk appetite continued from the third quarter, during which hedge funds increased bullish bets while cutting back on short positions. According to Goldman’s analysis of regulatory filings from 804 funds that own $2.1 trillion of gross equity holdings, the group carried a net long exposure of 51 percent at the end of September, the highest since 2015.

    Meanwhile, their short interest as a percentage of the S&P 500’s total market capitalization has fallen to just below 2 percent, matching January of this year as the lowest level since 2012.

    Goldman compiles a list of 50 stocks that show up most often among the top 10 holdings of fundamentally-driven hedge funds. The “hedge fund VIP list” included Facebook, Amazon, Alibaba, Google’s parent Alphabet and Microsoft as the top five and added 10 new names:

    MGM Resorts
    XPO Logistics
    SBA Communications
    Iqvia Holdings
    NRG Energy
    Marathon Petroleum
    On the short side, AT&T, Intel, Wal-Mart, Priceline and Target are the top five most important positions to hedge funds. Other than Priceline, the VIP short list’s new members included:

    General Mills
    Walgreens Boots Alliance
    United Technologies

  • Trading_Nymph

    Going a little Micro…US Rail Traffic at year high going into the seasonal slow time… http://railfax.transmatch.com/

  • Trading_Nymph

    Happy Thanksgiving Panther! I bet your table will be yummy and your Sister will it enjoy it all.

  • Trading_Nymph

    Fib Levels for JNK from 08 high/09 low

  • Trading_Nymph

    ROFL I just looked at JNK. We are 36.92, that is the 50% resistance/Support at 36.94…Strong Resistance

  • Trading_Nymph

    USD selling off against pairs since Fed Minutes..may end up with green close.