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  Thursday, 22 Jan 2015 | 1:43 PM ET

This is the price point to beware for falling oil

Posted By: Jeff Cox
Oil tanks and pump jacks are seen in an oil field near Bakersfield, Calif., on a foggy day, Jan. 17, 2015.
Lucy Nicholson | Reuters
Oil tanks and pump jacks are seen in an oil field near Bakersfield, Calif., on a foggy day, Jan. 17, 2015.

Many investors believe that declining oil prices are a good thing—for now—though some see $30 a barrel as the break point when the trend turns negative.

Earnings season has provided a good glimpse at how energy is impacting corporate America.

Outside the sector, this is turning into a pretty good quarter. Include energy, though, and things are fairly gloomy.

About 75 percent of S&P 500 companies that reported through Wednesday beat sharply lowered analyst expectations, according to S&P Capital IQ. That's come, however, amid a brutal quarter for energy companies, with the sector projected to show a 22.6 percent profit decline.

Overall, earnings for the fourth quarter of 2014 are expected to increase 4.4 percent, a number that's been drifting higher as results from 51 companies have come in.

»Read more
  Thursday, 22 Jan 2015 | 6:25 AM ET

Lagarde on European QE: It's already working

The World Economic Forum in Davos has many different topics on the agenda, but this year it coincides with a hotly-anticipated announcement by Mario Draghi, the president of the European Central Bank (ECB).

As part of the ECB's attempts to stimulate the deflation-hit euro zone, Draghi's press conference at 13:30 GMT, with a rate decision due at 12:45 GMT, is widely expected to be the moment the bank's Governing Council launches some form of government bond-buying.

And with some of the most powerful people on the planet all meeting in a conference center in Switzerland, quantitative easing (QE) is one of the hottest topics of the week.

Christine Lagarde, managing director of the International Monetary Fund (IMF), said on Thursday that expectations of a bond-buying program in Europe had already had an effect.

"To a point you can say that it has already worked," Lagarde said on a panel in Davos. "If you look at currency variation and where the euro is at the moment, you can't deny that there is expectations there that QE is about to come and is announced and will be significant."

European laggard economies were poised to benefit from the higher inflation expectations which would come with quantitative easing, Lagarde added. Official figures released earlier this month revealed that the euro zone slipped into deflation in December for the first time since 2009.

"If there is some re-anchoring of inflation in the euro area, those emerging European markets, which are pegged to the euro, will have the benefit of that," she said.

Speaking on the same panel as Lagarde, former U.S. Treasury Secretary Larry Summers added: "I am all for European QE."

»Read more
  Thursday, 22 Jan 2015 | 5:47 AM ET

Germany: Our job is to strengthen Europe

Posted By: Lawrence Delevingne
Sean Gallup | Getty Images

A top German official has said the country supports Europe's efforts to kick start the region's economy -- including a quantitative easing (QE) program -- but that other countries have to sell reforms to their citizens.

"The task for Germany now today is, through its own policies, structural reforms, its own investments, to support the EU and the Commission when it brings on to the market, so to speak, its stability package," Sigmar Gabriel, vice-chancellor and federal minister of economic affairs and energy of Germany, said at the World Economic Forum Thursday in Davos, Switzerland.

"But every nation," he added, "has to have the courage to broach such structural reforms and speak clearly about them without making people afraid. This is difficult."

Read MoreLagarde on European QE: It's already working

»Read more
  Wednesday, 21 Jan 2015 | 2:44 PM ET

Mario Draghi may need to get a bigger (QE) boat

Posted By: Jeff Cox

If Mario Draghi wants to have a significant market impact after Thursday's European Central Bank meeting, he better not think small.

The financial world's collective gaze will be focused on the ECB president after the session, during which policymakers are expected to launch a U.S.-style quantitative easing program aimed at injecting liquidity into the sputtering euro zone economy, and goosing asset prices in the process.

History, at least that generated by the Federal Reserve's historically ambitious three rounds of QE, would suggest that the initiative would boost stocks, commodities and bond yields and, hopefully, generate some real economic growth.

However, that's likely dependent upon how aggressive Draghi wants to get with the ECB's version of QE, and specifically whether it can shock a market that already is well aware of the plan.

"Our view is that the extent to which the ECB will surprise markets depends on size (well above market expectation of 500 billion euros) and the extent to which markets will perceive QE as being open-ended," Gilles Moec, European economist at Bank of America Merrill Lynch, wrote in a report for clients. "ECB communication will be the key."

»Read more
  Wednesday, 21 Jan 2015 | 1:16 PM ET

Manager 'truly sorry' for blowing up hedge fund

Posted By: Lawrence Delevingne
Scott Mlyn | CNBC

A hedge fund manager told clients he is "truly sorry" for losing virtually all their money.

Owen Li, the founder of Canarsie Capital in New York, said Tuesday he had lost all but $200,000 of the firm's capital—down from the roughly $100 million it ran as of late March.

"I take responsibility for this terrible outcome," Li wrote in a letter to investors, which was obtained by CNBC.com.

"My only hope is that you understand that I acted in an attempt—however misguided—to generate higher returns for the fund and its investors. But even so, I acted overzealously, causing you devastating losses for which there is no excuse," he added.

»Read more
  Wednesday, 21 Jan 2015 | 12:07 PM ET

Kiss that 'shrinking' budget deficit goodbye

Posted By: Jeff Cox

Among the laundry list of achievements President Barack Obama touted in his State of the Union speech Tuesday was a "shrinking" budget deficit.

While that's true on its face, there's more to the story, and it's likely to become a significant headache for his successor.

Obama and his supporters are correct in reporting that a budget gap when he took office of some $1.4 trillion has been trimmed significantly. The 2014 projection was for a $506 billion shortfall, while the 2015 number comes down to $469 billion, according to the Congressional Budget Office.

"At every step, we were told our goals were misguided or too ambitious; that we would crush jobs and explode deficits. Instead, we've seen the fastest economic growth in over a decade, our deficits cut by two-thirds, a stock market that has doubled and health care inflation at its lowest rate in 50 years," Obama said.

"At this moment — with a growing economy, shrinking deficits, bustling industry and booming energy production — we have risen from recession freer to write our own future than any other nation on Earth," he added later in the speech.

»Read more
  Wednesday, 21 Jan 2015 | 12:20 PM ET

Hot topic for 1-percenters at Davos: Inequality

Posted By: Lawrence Delevingne
A man begs on a street in Shanghai.
Peter Parks | AFP | Getty Images
A man begs on a street in Shanghai.

Rising economic inequality is casting a shadow over the World Economic Forum, a conference dominated by the proverbial 1 percent.

Oxfam, in a report timed to the start of the Davos conference, estimated that the combined wealth of the world's richest 1 percent could overtake that of the remaining 99 percent by 2016.

"Inequality is rising, and rising fast," Winnie Byanyima, executive director of Oxfam International, told CNBC on Tuesday. "This is dangerous. It is bad for democracy and for stable societies and it is bad for (economic) growth. The poor hurt."

Read More 'The poor hurt' as inequality rises 'fast': Oxfam

»Read more
  Wednesday, 21 Jan 2015 | 1:00 AM ET

At Davos, it's not all about the money...seriously

Posted By: Lawrence Delevingne
Stephen A. Schwarzman, Chairman and CEO, The Blackstone Group, USA.
Source: Wikipedia
Stephen A. Schwarzman, Chairman and CEO, The Blackstone Group, USA.

The World Economic Forum is teeming with elite investors this week, and it's not just to talk their own book.

"Davos," said Blackstone Group spokesman Peter Rose, "offers Steve [Schwarzman] an unparalleled opportunity in a highly efficient way to meet the leading politicians, business leaders, government officials, academics, central bankers and other thought leaders so as to better understand the myriad crosscurrents in the world's economies."

Indeed, most of the more than two dozen hedge and private equity fund managers—including Ray Dalio of Bridgewater Associates, Paul Singer of Elliott Management and David Rubenstein of Carlyle Group—make the long trip to the Swiss Alps to actually think about investing in the year to come, not just to sell potential clients or show their macroeconomic smarts on stage.

»Read more
  Tuesday, 20 Jan 2015 | 12:20 PM ET

For CEOs, at least, US looking better than China

Posted By: Jeff Cox
Scott Mlyn | CNBC

For the first time in five years, corporate heads like the U.S. more than China.

CEOs responding to an annual survey from PwC said a growing American economy is providing reason to keep money there rather than ship it to more robust economies around the globe.

Results indicate that the U.S. is the first choice for 38 percent of the corporate chieftains, compared to 34 percent for China. That's a turnaround and then some from results back to 2011, when the survey showed 39 percent of investors preferring China to a meager 21 percent for the U.S.

"As the U.S. recovery gains traction, it is gaining more adherents. Challenges remain, yet key measures of U.S. economic health are improving," a narrative accompanying the study said. "Business hopes are building that the American consumer market will start firing on more than one piston in 2015."

»Read more
  Tuesday, 20 Jan 2015 | 11:28 AM ET

Davos '15: Gates, Soros, Pharrell to tackle crises

Posted By: Lawrence Delevingne

As it gets started this week, the World Economic Forum is as big as ever.

The juggernaut of a conference in Davos, Switzerland, is projected to include more than 2,500 participants from 140 countries who will meet to "address key issues of global importance," according to organizers, in a small skiing village full of snow, armed guards and international press.

The attendee list for the 45th edition of the event is, as usual, star-studded.

Read MoreDavos: More women in 2015-but don't get excited

French President François Hollande, Chinese Premier Li Keqiang, German Chancellor Angela Merkel and Italian Prime Minister Matteo Renzi are some of the 40 heads of state and government coming.

Jack Ma of Alibaba, Mary Barra of General Motors, Satya Nadella of Microsoft and Eric Schmidt of Google are among the more than 1,500 business leaders attending.

»Read more

About NetNet

  • NetNet is where you'll find the low-down and the high jinks of Wall Street. It's the place for insider stories, trader gossip, and tales of the foibles of the moneyed crowd and the culture of finance.Wall Street news and commentary served fresh all day long.

 

  • Jeff Cox is finance editor for CNBC.com.

  • Lawrence Develingne

    Lawrence Delevingne is the ‘Big Money’ enterprise reporter for CNBC.com and NetNet.

  • Stephanie Landsman is one of the producers of "Fast Money."

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