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  Tuesday, 13 Jan 2015 | 2:57 PM ET

Low oil could be market ‘nirvana’: David Rosenberg

Posted By: Alex Rosenberg

If crude oil is able to stabilize between $40 and $50 per barrel, that would be fantastic for both the economy and the stock market, Gluskin Sheff economist and strategist David Rosenberg said Tuesday on CNBC's "Futures Now."

First, lower crude oil prices reduce a major expense for many households and businesses. Second, stocks as a whole would cease being victimized by the uncertainty caused by free-falling crude.

"It's not just the fact that you're still going to have the lagged impact of having lower fuel costs being a positive for margins of the non-resource producers and for the household sector," Rosenberg said. "But I think for the broad market, if we were to find a bottom and then stabilize within a range … at least it would inject some certainty into the general market place."

Crude oil prices fell again on Tuesday, hitting a new multiyear low, before bouncing back significantly, even breaking positive at one point in the day. This has reinvigorated calls that crude oil has bottomed.

Read MoreOil hitting $44 brings out bottom callers (again)

»Read more
  Monday, 12 Jan 2015 | 5:58 AM ET

Will companies fumble on earnings kick-off?

Posted By: Alex Rosenberg

Corporate America is about to get its report card for the fourth quarter, but with energy prices plunging and the U.S. dollar soaring, investors aren't quite sure what to expect.

Over the course of the fourth quarter, crude oil prices fell more than 40 percent, while the U.S. Dollar Index, a basket of major counterparts to the greenback, rose 5 percent.

What investors know is that the consequences of those moves will be felt, in some way, by American companies. What's unclear are their precise business impacts.

Read MoreAs dollar catches fire, US companies break a sweat

Many companies exposed to oil and the dollar use complex maneuvers to hedge their exposure to market moves, so the extent to which their overall results were impacted remains unknown. Meanwhile, it remains to be seen by how much low gas prices have boosted retail spending—and how drastically oil companies are cutting back on their equipment purchases.

With so much up in the air, investors are taking a cautious tone.

"It's always hard to predict what earnings are going to look like, but this quarter it's particularly challenging," said David Smith, chief investment manager at Bright Rock Capital Management, where he manages $2.5 billion.

"I think is highly likely that we see more earnings misses than in recent quarters, but we'll also get bigger upside beats," he added.

The first big week of fourth-quarter results is ahead, and it will dominated by the financials, with JPMorgan, Wells Fargo, Bank of America, Citigroup, and Goldman Sachs reporting results. Other widely watched names include Alcoa, which is reporting on Monday, and Intel, which releases earnings on Thursday.

»Read more
  Sunday, 11 Jan 2015 | 5:04 PM ET

Will companies fumble on earnings kickoff?

Posted By: Alex Rosenberg

Corporate America is about to get its report card for the fourth quarter, but with energy prices plunging and the U.S. dollar soaring, investors aren't quite sure what to expect.

Over the course of the fourth quarter, crude oil prices fell more than 40 percent, while the U.S. Dollar Index, a basket of major counterparts to the greenback, rose 5 percent.

What investors know is that the consequences of those moves will be felt, in some way, by American companies. What's unclear are their precise business impacts.

Read MoreAs dollar catches fire, US companies break a sweat

Many companies exposed to oil and the dollar use complex maneuvers to hedge their exposure to market moves, so the extent to which their overall results were impacted remains unknown. Meanwhile, it remains to be seen by how much low gas prices have boosted retail spending—and how drastically oil companies are cutting back on their equipment purchases.

With so much up in the air, investors are taking a cautious tone.

"It's always hard to predict what earnings are going to look like, but this quarter it's particularly challenging," said David Smith, chief investment officer at Bright Rock Capital Management, where he manages $2.5 billion.

"I think is highly likely that we see more earnings misses than in recent quarters, but we'll also get bigger upside beats," he added.

The first big week of fourth-quarter results is ahead, and it will dominated by the financials, with JPMorgan, Wells Fargo, Bank of America, Citigroup, and Goldman Sachs reporting results. Other widely watched names include Alcoa, which is reporting on Monday, and Intel, which releases earnings on Thursday.

»Read more
  Thursday, 8 Jan 2015 | 4:17 PM ET

The U.S. dollar trade: Too obvious to be right?

Posted By: Alex Rosenberg

When it comes to the U.S. dollar, everyone seems to agree on two things: It will keep soaring, and everyone's too bullish.

The U.S. Dollar Index, which tracks the currency by comparing it to a basket of six currencies (though it is heavily weighted toward the euro) is up 15 percent in six months. In fact, the index has risen in 13 of the last 15 sessions, taking it to a nine-year high.

The impetus behind the move is clear. Firstly, the U.S. economy is greatly outperforming economies across the globe. And in turn, this means Federal Reserve policy will tighten even as other central banks are loosening. That would translate into higher short-term yields for those holding dollars, especially on a relative basis, thus making it more attractive to hold greenbacks.

But precisely because that is such a widely held belief, the bullish dollar trade has become just the kind of "no-brainer" of which traders tend to be wary.

"Every trader I talk to expects the Dollar Index to go higher over the year," Jim Iuorio of TJM Institutional Services said Thursday on CNBC's "Futures Now." "But when you get to the point where everybody seems to be short the euro and the yen, then I think the risk becomes to the upside" for the euro and yen, and consequently to the downside for the dollar.

Many currency experts agree, saying that a near-term pullback is likely.

"Positioning is very extreme right now. Everyone is bullish, and it's just one-sided," said Win Thin, head of emerging market currency strategy at Brown Brothers Harriman. "Despite the skewed positioning, we still do favor the dollar, but we'd expect to see some correction at some point to get rid of the positioning skew."

Read More Central banks could send dollar higher: Doll

»Read more
  Tuesday, 6 Jan 2015 | 3:33 PM ET

Traders still betting on much lower oil

Posted By: Alex Rosenberg

The incredible crude collapse continues, as WTI crude oil futures fell as low as $47.55 per barrel on Tuesday afternoon, the lowest level in nearly six years. And energy expert Stephen Schork, editor of the widely read Schork Report, sees no reason for the selloff to end now.

"We're divorced from the economics, from the rig economics, so now fear and greed are in the market. Low prices are becoming the excuse for lower prices," Schork said Tuesday on CNBC's "Futures Now." "Trying to pick a bottom here is akin to the old adage of catching a falling knife. So don't try to pick the bottom, just ride the wave lower."

That's not to say that oil has no reason to slide. Even as oil production remains robust, "we've got really poor economic growth around the world," Schork said. "Japan is in recession, industrial production in China is falling, industrial production in India is falling, Europe is on the precipice of recession."

Read MoreNot just oil: Are lower commodity prices here to stay?

»Read more
  Tuesday, 30 Dec 2014 | 5:25 PM ET

Gartman: If you buy one thing in 2015, buy this

Posted By: Maxwell Meyers

It's hard out there being a commodities king this year. Oil got crushed. Copper was obliterated. And soybeans got mashed. But Dennis Gartman has his eye on one commodity that met a particularly cruel fate in 2014: Gold

Despite bullion being just pennies away from posting its first back-to-back yearly loss since 1997, the self-proclaimed commodities king and author of the eponymous Gartman Letter told CNBC.com's "Futures Now" on Tuesday that he sees gold enjoying a solid 2015.

»Read more
  Wednesday, 24 Dec 2014 | 7:00 AM ET

Buying stocks now: The world’s easiest trade?

Posted By: Alex Rosenberg

It appears to be the world's easiest trade: Taking a bullish position on stocks for the year's last five trading sessions. Over the entire history of the S&P 500, not only has the index tended to rise over the last days of a year, but it has tended to do so with greater consistency.

Going back to 1928, the S&P 500 has returned 0.14 percent in the average five-day period. But in the last five days of the year, the S&P has enjoyed an average return of 1.19 percent, according to Carter Worth, Sterne Agee's chief market technician. (Technically, the S&P 500 wasn't created until 1957, but historical data from the earlier 90-stock S&P index is used to extrapolate earlier S&P 500 performance.)

And while the standard deviation of the S&P's average five-day return is 2.64 percent, the standard deviation around the average gain in the waning days of the year is only 1.87 percent, Worth found. That tells us that we can expect less variation around the average—which is logical, since light trading is to be expected.

Worth has generally maintained a bearish outlook on the overall market. But when it comes to the last few days of the year, "the odds are high that they play out well," he said in a recent note to clients. "There is not only a higher-than-average return over the last five days, but there is less variability around the average."

Read MoreNext up: 2,100 on the S&P 500

So will the last five trading days of 2014, which begin with Wednesday's short session, bring the expected holiday cheer?

»Read more
  Tuesday, 23 Dec 2014 | 3:16 PM ET

As American economy roars, US dollar soars

Posted By: Alex Rosenberg

The American economy is continuing to beat expectations, especially relative to the performance of many economies around the globe. And that's sending the U.S. dollar surging.

On Tuesday, the Commerce Department announced that in the third quarter, gross domestic product rose at a seasonally adjusted annual rate of 5.0 percent, nicely above the earlier estimate of 3.9 percent. Consequently, the U.S. dollar index, which compares the U.S. dollar to a basket of six currencies, jumped to the highest level since April 2006 on Tuesday.

Read MoreUS third-quarter growth revised up to 5%

Good economic news always tends to boost a nation's currency, but that is doubly true in the current environment, as the Federal Reserve is widely expected to raise short-term rates in 2015. Generally speaking, the better the economy, the sooner the Fed is likely to raise its federal funds rate target. And greater short-term rates would make it more attractive to hold dollars rather than other currencies.

Expectations of an earlier Fed move could certainly be sensed in Tuesday trading. The yield on two-year Treasury notes rose to the highest level since April 2011 after that GDP report.

By the work of Michael Block, "This yield is telling you that the market is nervous or expectant about a rate hike next year," the chief strategist at Rhino Trading Partners wrote in a Tuesday note to clients.


»Read more
  Monday, 22 Dec 2014 | 11:24 AM ET

Natural gas collapses—‘This is panic selling’

Posted By: Alex Rosenberg

Call it the perfect nonstorm.

Natural gas was cratering Monday, as mild weather forecasts compound a supply surplus and a general energy market swoon.

Nat gas futures were as low as $3.12 per million British thermal units, which is the lowest level since January 2013, and represents a decline of 15 percent in two trading sessions. (The futures have ticked a bit higher after hitting those lows at 9:44 a.m. ET, but are still down sharply on the day.)

The backdrop for the move is Thursday's natural gas inventory report, which showed a year-over-year supply surplus for the first time since December 2012. However, it was not until this news was compounded by a mild seven-day forecast for the Northeast that nat gas futures really started to plunge.

Read MoreDownside of New York's fracking ban

"Going into the weekend, it looked like the I-95 corridor was going to see pretty good demand," said Stephen Schork of The Schork Report, referring to the area from Boston to Washington, D.C., around Interstate 95. "But now we're looking at some pretty mild temperatures this week into the next, so you get a situation where people are just bailing on this market right now."

Nat gas bulls prey on extreme weather—hot in the summer, cold in the winter—because individuals and businesses use nat gas for both heating and cooling. But so far this year, much of the United States has seen mild weather in both summer and winter.

And with this latest forecast, traders who have recently gotten long seem to have finally given up on the hope that a repeat of last winter is ahead, when frigid weather met shrinking supplies to send nat gas futures as high as $6.49.

»Read more
  Sunday, 21 Dec 2014 | 5:03 PM ET

Why 2015 could bring the surprising return of risk

Posted By: Alex Rosenberg

Something funny happened on the way to another huge year for stocks.

With just a week and a half left in 2014, the S&P 500 is up 12 percent, besting nearly everyone's expectations. Still, the best-performing sectors haven't been cyclical stocks that generally rise when the broader market is soaring and the economy is growing.

Instead, health care and utilities stocks have led the way, with 27 percent and 23 percent gains for those sectors, respectively.

Now, the big question is whether that trend will turn around in 2015—setting the stage for a more traditional bull market led by the sort of cyclical stocks that tend to lead in good times and lag in bad.

Over the past year, "people were in search of yield, and that really was the personality of the rally in 2014," said Jim Iuorio of TJM Institutional Services. "What I want to see is things further out the risk spectrum start to rally, and if that's the case, that's when I'll think that we're on a risk-on mode."

BlackRock's Rosenberg: Stocks will beat bonds in 2015

To Jonathan Golub, RBC's chief U.S. market strategist, the key issue is that stocks have surged—even as economic growth has been lackluster.

"The real question is, will the economy grow fast enough to support more economically sensitive cyclical names? This is the ninth year in a row where GDP grew under 3 percent," he pointed out.

In 2015, economists expect growth to finally surpass 3 percent, but "that's been the expectation for each of those nine years, and we haven't seen it," Golub said. "My gut tells me that the economists will prove to be a little bit more optimistic once against."

For that reason, the analyst is looking for the S&P to return 12 to 15 percent, including dividends, once again. However, he says the rally will likely be led by a mix of cyclical and non-cyclical sectors. Specifically, the strategist favors technology and health care stocks, and is less optimistic about industrials.

»Read more

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