Futures Now Futures Now: Blog


  Wednesday, 10 Jul 2013 | 7:00 AM ET

Ouch! Earnings will disappoint this market: Kass

Kass: I¿m 'Very Concerned' About Earnings
Kass: I'm 'Very Concerned' About Earnings   

Earnings and the future of quantitative easing: the market's two biggest concerns. But they're one and the same to Doug Kass, president of Seabreeze Partners Management.

"I see a false economic dawn in the U.S. and around the world," Kass said on CNBC's "Futures Now," adding that the markets and economic data have been boosted by the Federal Reserve's monetary policies. "The bottom line is that interest rates are a very important raw material in the U.S. economy. As they rise, it affects everything—profits, capital spending, hiring."

Rolling back QE will have serious ramifications, he said, and for him there's no question that it's coming. "I think tapering is a given, probably in September," he said.

In the meantime, the earnings picture looks negative to Kass, because easing has obscured the truth about how weak corporate profits are.

"I don't expect earnings to meet consensus expectations," he said. "The singer Robert Palmer was 'Addicted to Love.' Unfortunately, our corporations, our consumer and even are government are addicted to lower interest rates."

»Read more
  Tuesday, 9 Jul 2013 | 2:04 PM ET

Mark my words: Gold will bounce

Posted ByJim Iuorio

Merrill Lynch's Gold Call
Merrill Lynch's Gold Call   

Looking for a fundamental reason to own gold? Keep looking.

Simply put, the fundamentals do not look good for the metal. Inflation is tame, interest rates have risen and stocks remain buoyant. Gold has lost more than 30 percent of its value over the last nine months, which has washed out many of the weaker hands.

(Read More: Gold's Jobs Nightmare)

»Read more
  Monday, 8 Jul 2013 | 12:54 PM ET

The smart way to play crude

Posted ByJim Iuorio

Futures Now: Oil at 15-Month High
Futures Now: Oil at 15-Month High   

Crude has had an incredible run over the past two weeks. But I'd think twice before hopping aboard this speeding train.

At today's highs, August crude oil futures was up more than 12 percent in two and a half weeks. It would be easy to attribute this rally to tensions in Egypt, but that would tell only part of the story. Both crude and S&P futures began their move on June 24, and although the move in stocks hasn't been as dramatic, it's reasonable to assume that part of crude's move is due to a prevailing risk-on mentality.

(Vote in our poll: Has Oil Hit its High for the Year?)

»Read more
  Monday, 8 Jul 2013 | 12:03 PM ET

Has Oil Hit its High for the Year?

Oil derrick with sunset
Harold Sund | Image Bank | Getty Images

Crude oil futures touched a 14-month high of $104.12 in early Monday trading, before promptly falling two dollars. Crude oil has had a fantastic run-up over the course of the past two weeks, rising more than $10 as Egyptian concerns have taken the fore.

»Read more
  Monday, 8 Jul 2013 | 8:21 AM ET

How to Trade Gold This Week: Pro

Gunay Mutlu | E+ | Getty Images

Gold bugs are doing their best to defend $1,200.

Gold retested $1,200 on Friday, trading down nearly $50 from the highs following a much-better-than-expected employment report. We are not seeing the weakness follow through in this session, as the market has stabilized and is retesting the $1,233 retracement level, which will now serve as resistance. A close above $1,233 on Monday will signal a likely consolidation back toward $1254.60 to $1,255.70 this week.

Friday's jobs report led the U.S. dollar to soar to new swing highs, putting pressure on commodities priced in dollars, which we saw clearly in the metals. On Monday morning, the dollar was slightly in the red, which was giving the metals a breather.

(Read More: Gold's Jobs Nightmare)

»Read more
  Friday, 5 Jul 2013 | 10:09 AM ET

Strong Jobs Number Is Gold's Nightmare

A customer examines a selection of gold bars from Swiss manufacturer Argor Hebaeus SA.
Akos Stiller | Bloomberg | Getty Images
A customer examines a selection of gold bars from Swiss manufacturer Argor Hebaeus SA.

The economy just got some great news, and gold hates it.

The U.S. economy added 195,000 jobs in June, easily besting the 165,000 consensus estimate. As soon as it heard the news, gold tanked $26, dropping to the lowest level in a week. But why?

"Gold hates any good U.S. data at this stage," said Kathy Lien of BK Asset Management, "because any kind of good news is driving the dollar sharply higher, and gold is just being punished as a result."

(Read More: Job Growth Posts Large Gain in June; Rate Holds)

For Lien, the Federal Reserve's tapering plans remain the market's main focus. And she believes that today's number "overall reinforces the idea that the data is good enough to taper in September."

(Read More: Why Fed May Hike Sooner Than You Think)

That is certainly what the bond market seems to imply. Yields are rising as traders expect that the Fed is now getting the economic signals it needs to exit the bond market shortly. And as yields rise, gold looks like a worse and worse investment, because its zero percent yield looks increasingly meager when compared to the yield of Treasury notes.

(Read More: Why Higher US Yields Should Cheer Investors)

As George Gero, gold analyst at RBC, wrote in a note: "Bond yields jumped higher," which makes for "strong dollar and weak metals."

»Read more
  Wednesday, 3 Jul 2013 | 10:50 AM ET

Three Reasons Why Commodities Look Horrible

Roubini Strategist: Why JPMorgan is Wrong on Commodities
Why JPMorgan Is Wrong on Commodities: Strategist   

It's been one of the worst investments of 2013—and this Roubini strategist thinks it will get even worse.

Gold, copper and grain prices have dropped precipitously this year. In fact, JPMorgan's commodity team recently used that as a reason to get bullish on the space. "In a number of commodities, prices have fallen far enough for long enough to force involuntary cuts in production and to spur fresh demand," JPMorgan's note read.

In fact, JPMorgan said that "Sentiment is universally bearish," creating some real opportunities.

But Gary Clark says that sentiment is bearish for a reason. On Tuesday's "Futures Now," the commodities macro strategist at Roubini Global Economics listed the three catalysts that will continue to drive commodity prices lower.

Reason One: Declining Chinese Demand

Chinese expansion has been a huge factor that has undergirded the long run up in commodity prices. But now, "we're seeing weakening in demand growth across the board there," Clark said.

As Clark predicts in a recent note, "China's slowdown will accelerate next year, driven by a collapse in the metal-intensive, investment-driven portion of growth. Demand for metals will fall much more sharply than headline GDP growth numbers would suggest, from double-digit to low single-digit growth and possibly to zero" in the case of iron ore.

And just how important is Chinese demand? "To offset a 1 percent decline in Chinese copper or aluminum demand would require a 3 to 5 percent boost in U.S. or European demand or a 15 to 20 percent boost in Indian or Brazilian demand," Clark writes, adding: "all of which are highly unlikely."

»Read more
  Wednesday, 3 Jul 2013 | 8:32 AM ET

Want to Short Oil? Good Luck!

Hundreds of thousands of Egyptian demonstrators gather at the presidential palace during a protest calling for the ouster of President Mohamed Morsi on July 1, 2013 in Cairo.
Mahmud Khaled | AFP | Getty Images
Hundreds of thousands of Egyptian demonstrators gather at the presidential palace during a protest calling for the ouster of President Mohamed Morsi on July 1, 2013 in Cairo.

Call it a crude awakening. Geopolitical risk, a large inventory draw, and anxiety about going home short over a holiday weekend have set up oil for higher prices.

Crude oil futures have seen a tremendous move higher this week, as the momentum that carried oil from last week's bottom on the worries of China's cash crunch has been accompanied by this week's tensions in Egypt. In addition, oil is entering the peak of demand season this week. And on Tuesday, inventory data from the American Petroleum Institute showed a tremendous draw. All in all, traders have been given every reason to buy this market.

(Read More: Oil Rises on US Oil Stock Decline, Egypt)

After the API data, crude was able to test a high as $102.18 on Tuesday night. The market has already begun correcting back below $101. Wednesday's Energy Information Administration data will be released as regularly scheduled, and will be one of the most closely watched inventory numbers in recent weeks.

Support will now be found at $99.98 to $100, and a close below here will show signs of a failure. To maintain this pace of momentum, bulls want to see a retest of $102 on Wednesday, and a close above $101.20.

»Read more
  Tuesday, 2 Jul 2013 | 4:10 PM ET

What Egypt Means for Crude: Pro Trader

Posted ByJim Iuorio

Futures Now: Oil's Risk Premium Increases
Oil's Risk Premium Increases   

As the situation in Egypt escalates, crude oil prices have approached the $100 mark. There is always a significant risk premium built into the price of crude based on the tumultuous political nature of the Middle East. Egypt is not a huge oil producer, but it is important to the oil market because of its proximity to key shipping lanes.

(Read More: US presses Egypt president Morsi to make political concessions)

In reality, the massive protests against Egyptian President Mohamed Morsi we are currently seeing probably won't end up resulting in any supply disruption—or at least, any disruption that offsets the decent supply levels of global crude.

The issue, however, is that the market has been reminded that there is headline risk, and that short oil positions can cause anxiety. This is particularly true considering that the market will be closed for the Fourth of July holiday.

»Read more
  Monday, 1 Jul 2013 | 8:58 AM ET

Gold’s Level of Truth

Gunay Mutlu | E+ | Getty Images

Gold is enjoying a corrective bounce—but investors shouldn't get too excited yet.

Bullion showed signs of life in the second half of the session on Friday, and recovered from its lows to trade above resistance and close at $1,223.70.

On Monday, gold reached a high of $1,247.40, and is trading at roughly $1,240. We believe this to be short covering into the end of the month and the end of the quarter, as investors lock in profits from this bear market.

(Read More: Three Reasons Gold Will Go to $800: RBC Strategist)

»Read more

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