In response to special questions, dealers reported some increase in the use of leverage over the prior six months by traditionally unlevered investors—in particular, asset managers, insurance companies, and pension funds.
This is the fourth interest rate hike since October that is meant to collar inflation. So far it has not worked. However, when it finally does..?
Call us cynical, but we are of the mindset that 1 temporarily displaced worker at a Toyota factory is worth more than 2 gainfully employed hamburger flippers.
The Nymex energy complex ended last week on a very strong note. The gasoline contract (RBOB) for June delivery closed at 313.02. That translates into a national average price for retail gasoline of ≈$3.70 a gallon by the 04th of July holiday. To this effect, we are prepared for a material decline in demand elasticities.
Discussing whether skyrocketing oil and gas prices are slowing down the economic recovery and the Republicans' alternative to President Obama's energy plan, with David Vitter, (R-LA); Joy Reid, The Reid Report; John Hofmeister, former Shell Oil president/CEO Of U.S. operations and John Kilduff, Again Capital.
Yesterday (Thursday), the EIA reported a 12 Bcf injection in to storage, blowing away the 2 Bcf median draw expected by analysts. However, it seems that the injection was not entirely unexpected — the largest analyst estimate came to 13 Bcf and Bloomberg’s whisper number came to a 5 Bcf injection. Put simply, expectations were all over the map.
We question the logic of cutting down on imports. According to the latest preliminary weekly data from the DOE, we imported 8.41 MMbbls/d of crude oil last week. Our largest trading partner was Canada, with 2.05 MMbbls/d of supply with Venezuela coming in a distant second at 1.08 MMbbls/d.
Yesterday, the Conference Board released the latest consumer confidence index. We have stated several times that confidence would likely to lower than the 70.4 seen in February and the 65.0 expected by analysts. Indeed yesterday’s number came to 63.4, its first drop in six months.
In another encouraging sign, the savings rate (as a percentage of disposable income) dropped from a six month high of 6.1% in January to 5.8%. The amount of government unemployment insurance benefits also fell by 7.81% to $113.3 bn, the lowest point since April 2009. This seems to paint a pretty bullish picture for the health of the domestic consumer, right?
The general consensus is that prices above $3.500 begin to cause not insignificant demand destruction. Yet the latest vehicle miles travelled data suggests that demand elasticity begins to wane much earlier.