Category: INO.com Contributors

Hurricane Causes Modest Crude Stock Draw

Posted on by Robert Boslego

According to the Energy Information Administration, U.S. crude inventories (excluding SPR) fell by 7.2 million barrels last week to 1.395 billion, and SPR stocks dropped by 0.8 million barrels. Total stocks stand 101 mmb above the rising, rolling 5-year average and about 122 mmb higher than a year ago. Comparing total inventories to the pre-glut average (end-2014), stocks are 336 mmb above that average.

Crude Oil

Crude Production

Production averaged 9.9 mmbd last week, off 600,000 b/d from the prior week due to the hurricane impact on USG operations. It averaged 10.525 mmbd over the past 4 weeks, off 16.1 % v. a year ago. In the year-to-date, crude production averaged 11.645 mmbd, off 4.5 % v. last year, about 500,000 b/d lower. Continue reading "Hurricane Causes Modest Crude Stock Draw" →

Big Banks Moving Beyond COVID-19

Posted on by Noah Kiedrowski

Citigroup (C), JPMorgan (JPM), Bank of America (BAC), and Goldman Sachs (GS) are all fresh off earnings with the highly disruptive COVID-19 backdrop still festering. The headline numbers were fantastic with beats on both the top and bottom line for Citigroup, JPMorgan, and Goldman Sachs, with Back of America missing on top-line revenue but beating on bottom-line profit. Big banks are evolving to the COVID-19 landscape domestically and abroad despite the possibility of widespread loan defaults, liquidity issues, ballooning credit card debt, and stressed mortgages. To exacerbate these COVID-19 impacts, interest rates, Federal Reserve actions, yield curve inversion, and liquidity are critical elements.

The business's customer side continues to be problematic as the pandemic's duration continues to drag on with no signs of slowing. A segment of the consumer base is faced with lost wages and the real possibility of not meeting their financial obligations, which will unquestionably have a negative impact on revenue and earnings. Capital preservation is now at the forefront, with share buybacks being halted and dividend payouts arrested. Large capital reserves have been put aside for anticipated financial challenges. The big banks have demonstrated their ability to evolve in the face of COVID-19 and present compelling value.

Post Financial Crisis - Big Banks Prepared

The big banks are far stronger and more prepared than they were during the 2008 Financial Crisis and have rigorous annual stress tests that maintain fiscal discipline. Banks are well capitalized and working with clients and consumers on payment deferrals if impacted by the pandemic. Continue reading "Big Banks Moving Beyond COVID-19" →

3 Stay-At-Home ETFs For Your Portfolio

Posted on by Matt Thalman

As we continue to deal with the world-wide pandemic and the changes to our daily lives as we knew them before Covid-19, most people would agree a lot has changed. There have even been a few coined terms in the investing world that have arisen from the pandemic, with the most popular being the "stay-at-home stocks. For a large part, this new phrase has become the 'new' FANNG stock group.

The stay-at-home stocks have been on a tear this year as they have seen their popularity not only as investments increase, but they have more users who, in most cases, are spending more money. Revenues from these companies have grown at a tremendous clip in 2020. Even though some are still not yet profitable, many believe it is just a matter of time until they become wildly profitable and monster growth stocks for years to come.

The most popular reason for this type of thinking is not because people believe the pandemic will last for years and years, but because the pandemic has changed our lives so that we will not likely revert to our old habits styles of living. For example, many believe Zoom Video (ZM) has already become a verb and will dramatically reduce the need for some business travel and a large amount of 'in person' meetings that we all used to sit in on. Furthermore, the reduced need for 'in person' meetings will likely continue to reduce the need for employees working out of a central office instead of working remotely.

There are countless ways how the pandemic and the 'new normal' has changed our lives and how these 'stay-at-home stocks' will continue to perform well in the future. So, let's look at a few ETFs that focus on the 'new normal.' Continue reading "3 Stay-At-Home ETFs For Your Portfolio" →

The King Requires Respect

Posted on by Aibek Burabayev

Before we get down to the update, I would like to answer the comment of our esteemed readers posted last week in more detail about the Cup & Handle pattern on the big gold chart. I think it will be interesting for all to see the visualization of my answer. Besides that, I prepared a bonus chart for you with an established pattern and a trade setup.

Let us start with that big gold chart first.

Gold cup handle pattern

The reader kindly provided exact coordinates, so I just built the pattern. As we can see in the chart above, it is safe to say that the shape of a Cup could have been completed already (blue). However, as I answered to that comment, we are missing the Handle part of the pattern yet. I put the possible shape of it in red on the chart. The price should make a zigzag inside of the Handle first; it could take several years as Cup has been shaped within long 9 years. Only then, the price could continue to the upside. The target will be located beyond $3000. To sum up, the pattern itself is possible, but it is not fully shaped yet, and we should wait to see how the market will play. Continue reading "The King Requires Respect" →

The Seasonal Futures Market Is Upon Us

Posted on by Mike Seery

Orange Juice Futures

Orange juice futures in the January contract settled last Friday in New York at 116.85 while currently trading at 116.60, basically unchanged for the trading week looking for some fresh fundamental news to dictate short-term price action.

I am not involved, but I do have a bullish bias towards the upside, especially as we enter the highly volatile winter season, producing a frost in the State of Florida, sending orange juice prices sharply higher. That situation has happened on multiple occasions, historically speaking. If you take a look at the daily chart, the uptrend line remains intact. It looks to me that the 110 level will hold, and I will be looking at a bullish position in the coming days ahead as the chart structure will improve; therefore, the risk/reward is becoming more in your favor.

Orange juice prices are trading right at their 20-day moving average as the trend is mixed at the current time with average volatility. Still, that situation will not last much longer as the volatility during the winter months can become extremely violent, so look to play this to the upside.

TREND: MIXED
CHART STRUCTURE: IMPROVING
VOLATILITY: LOW

Silver Futures

Silver futures in the December contract settled last Friday in New York at 25.10 an ounce while currently trading at 24.45 down about $0.65 for the trading week as prices are still stuck in a 3-week consolidation pattern.

I do not have any precious metal recommendations, however, I'm keeping a close eye on a bullish silver trade here in the coming days ahead. I still think prices will break that $30 level, which was hit back in August. The chart structure is starting to improve daily; therefore, the monetary risk will start becoming more in your favor next week. I will be recommending a bullish position if prices close above the 25.71 level while then placing the stop-loss under the Sep 24 low of 21.81 as an exit strategy. Continue reading "The Seasonal Futures Market Is Upon Us" →