So, President Trump is using his leverage with the Saudis saying you must replace Iranian oil because we have got your back against your nemesis. The Saudis, of course, must look like any move they make is within the boundaries OPEC and Russia has set. Iran Oil Minister Bijan Namdar Zanganeh said any production increase above limits agreed to by OPEC would “breach” the deal, according to a letter he sent to OPEC President Suhail Al Mazrouei and distributed by the Iran Oil Ministry’s news service Shana. OPEC should reject the U.S. call for a production increase which is “politically motivated against Iran,” he said, as reported by Bloomberg.
The coming week (July 1-5) should consolidate in about half of the symbols I track., but some inside-pivots breakouts show as setups in the charts. The S&P 500, yen, Eurodollar (slightly-higher pivots) and gold have trending weekly pivots for next week, meaning conditions are right for fewer directional turns and twists in these and wide-ranges are likely.
Major U.S. benchmarks pared early losses yesterday to notch a solid session to which they extended gains overnight. The S&P traded to a high of 2737.50 and is being led by the banks after yesterday’s post-bell stress test results; pre-market the XLF is up nearly 1% and JP Morgan and Bank of America are both up more than 1.5%.
With the Trump Administration working toward zero Iranian exports by November, Libyan oil supplies at risk due to clashes with militias, and crashing supply from Venezuela, reports of tightening U.S. supply is keeping oil on edge. Crude oil price continued its drive, hitting $74 a barrel for the first time since that fateful OPEC meeting in November 2014.
MODERN TRADER explores the effect of a potential trade war on U.S. equity markets. Will it end the bull run or will low interest rates allow U.S. equities to maintain its momentum? Read on. We also attempt to identify the key drivers of active equity hedge funds.
The most important factor in global markets right now is trade. Tensions heated up to start the week after a tweet from President Trump called for, “all countries that have placed artificial Trade Barriers and Tariffs on goods going into their country, remove those Barriers & Tariffs or be met with more than Reciprocity by the U.S.A”.
The global oil market supercycle that we predicted would happen a few years ago is becoming increasingly clear to the crude oil market. It is hard to ignore what is happening when the data in the United States and around the globe is seeing the seeds of a bull market in energy that will last for years.
Last week, West Texas Intermediate crude oil traded down to $63.70 per barrel intraday, the same level it was trading at in early January. Much like the US stock market, prices had traveled both higher and lower in the first six months of the year, but was trading essentially unchanged from the level seen on the first trading day of the year.