Louise Yamada, the founder of Louise Yamada Technical Research Advisors, explains how oil could reach $70 despite near-term hurdles. » Read More
By: Brian Price
Chris Louney of RBC Capital Markets explains how recent highs and lows for gold coincide with Donald Trump's chances of becoming president. » Read More
If you're an investor avoiding the oil space, you could be missing out on the best opportunity in years.
That's what one veteran investment manager is arguing — comparing the oil glut to the opportunity presented to investors during the depths of the housing crisis.
"There is enormous opportunity in the oil area. We are doing a lot of research there. We look at it kind of like housing in 2010," Ross Gerber, CEO of Gerber Kawasaki Wealth and Investment Management , said Tuesday on CNBC's "Futures Now."
In the past six years, the SPDR S&P Homebuilders ETF has rallied by more than 100 percent. Gerber believes the oil sector could be positioning itself for similar gains.
"The market has been totally beholden to oil over the last three to six months. ... We're exiting a period where we feared total devastation in the oil patch leading to bankruptcies and defaults," he said, even as volatility continues to grip the area. "It's only the beginning of the fixing of this process."
Crude oil, which has surged by nearly 25 percent in the past eight weeks, has been under pressure again this week due to oversupply concerns. But it's not discouraging Gerber from sticking to his bullish case.
"The supply and demand imbalance still exists currently. But we've seen some supply come off the market, and we've seen an increase in demand, which has created a little more of a perception of stability," he said. "We think oil will probably sit around the $40 to $45 which we're fine with. It's the best benefit to the economy and the oil producers can continue to exist."
Troubling aspects of the market have persuaded one of Wall Street's most outspoken money managers to go defensive.
BMO Private Bank chief investment officer Jack Ablin is now refraining from taking risks in this volatile environment. He said this as stocks completed a four-week win streak last week, pulling the Dow Jones Industrial Average back above 17,000.
"I think we have come pretty far pretty quickly — especially since the underpinnings of value and fundamentals haven't really changed that much," Ablin said recently on CNBC's "Futures Now."
Ablin, who manages about $68 billion in assets for individuals and families, said two things "disturb" him right now: The 200-day moving average trending lower, and credit conditions remaining tight.
"We're not seeing much easing going on in credit spreads," he said, referring to the difference between the yields on riskier debt and on safer fixed income products.
"While overall yields that corporations pay may be at or just slightly higher than they were say six months ago, spreads... remain pretty aggressive, suggesting risk aversion," he added.
Last week, the S&P 500 Index came close to closing above a key level. Actually, it didn't come close.
It came very, very, very close.
The S&P 500 rose 2.7 percent over the course of the week, and hit its highest level in nearly two months after a strong February jobs report. In Friday's session, it also crossed above the key level of 2,000, which has developed importance for both psychological and historical reasons.
It didn't close above that level, however. Instead the S&P 500 closed at 1,999.99 — or more specifically, at 1,999.98722585876.
Never before has the S&P 500's closing price been that close to a number divisible by 100. Before Friday, the S&P had never seen a "99.99" close, Howard Silverblatt, senior index analyst at S&P Dow Jones Indices, told CNBC.
Silverblatt adds that there have been two closes right at a 100.00 value, but not in a while. The two dates in question are October 25th, 1979 and July 28th, 1978 — with the index closing at 100.00 each time.
Ron Paul wants to deliver a message to the market that he claims the Federal Reserve refuses to do itself.
The former U.S. Republican congressman said this week that the Fed has been propping up markets, and the U.S. economy has already entered a recession despite what central bankers might say.
"They're paid to spin it in a positive manner," the libertarian firebrand told CNBC's "Futures Now" in an interview.
He added: "You can't expect them to say anything else."
Markets in Japan are getting ready for a huge comeback, according to Stephen Parker of JPMorgan Private Bank.
Japanese stocks have been severely battered in recent months, with the Nikkei 225 index falling 15 percent this year. But Parker says the market is actually set to recoup all those losses, and finish 2016 in the green.
In past years, Japanese companies were focused on preserving jobs, he said. Now, he expects to see a "major change" in executives prioritizing shareholder returns. This will lead to companies using their accumulated cash piles to raise dividends and implement stock buybacks.
Japan "is now delivering some of the best earnings growth in the world. And if you think about a world where overall economic growth is pretty slow, you want to focus on markets where you can actually see companies do things to improve margins and deliver on earnings growth," Parker said Tuesday on CNBC's "Futures Now."
Compared to U.S. companies, Japanese firms have nearly three times as much cash as a percentage of market cap, Parker said. He added that 2016 is on a record-breaking track for Japan in terms of buybacks.
In addition, Parker expects Japanese companies to see earnings growth this year of 5 to 10 percent. Coupled with the sell-off in Japanese stocks, Parker said the current environment provides investors with a substantial buying opportunity.
"The markets are actually some of the cheapest we're seeing anywhere," he said.
According to Parker, several specific catalysts have contributed to Japan's market rout. For one, he said, investors have cashed out on profits after the Nikkei outperformed most other stock markets in 2015. Japan has also suffered from nervousness surrounding China's economic slowdown, as well as concerns over the country's monetary policy.
Parker also said investors have attributed rising Japanese stocks to a weakening yen. But even if the yen continues to strengthen, the pressure on stocks should soon abate, in his view.
"The fact that a lot of people were associating the rally in Japan with a weaker currency, I think that's an old story," he said. However, "as investors begin to look back and see what companies are delivering from an earnings perspective, that potentially is a big positive and a big tailwind for Japanese companies."
Stocks may have rebounded from their recent lows, but the option market still implies a big chance that stocks plummet anew before the year is out.
After falling as low as 1,810 two weeks ago, the S&P 500 Index bounced significantly in the prior week, closing Friday trading at 1,918. But even as stocks somewhat regained their footing, the market's fear certainly has not dissipated.
According to options market data from multiple providers, the December quarterly options expiring at the end of the year imply a 50 percent chance that the S&P 500 will touch 1,600 at some point in 2016. That would be a drop of nearly 17 percent from current levels and a full-year decline of 22 percent.
And it's not just that big moves are generally expected in this more-volatile market. The converse upside level — the highest point which traders think the S&P has at least a 50 percent chance of a touching in 2016 — is 2,110, or just 10 percent above Friday's close.
The dramatic amount of downside traders appear to be bracing for "tells you that this is sustainable fear, even going out six to twelve months," Brian Stutland of Equity Armor Investments said last week. "People clearly think that the downside could be real, and they want protection."
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