Wall Street Breakfast

Author: bmotrader   |   Latest post: Thu, 14 Nov 2019, 10:23 AM


Wall Street Breakfast: Crude Rallies After Latest Tanker Attack

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Oil prices rose 2% to $54.61/bbl overnight after Iranian officials said two rockets had struck a tanker belonging to the National Iranian Oil Company traveling through the Red Sea. The tanker is now ablaze off the Saudi port city of Jeddah, with investigators looking into the sources of the missiles. Recent attacks in the region have centered on crude facilities and tankers, including a drone-and-cruise-missile strike that halved Saudi Arabia's output and mysterious attacks on oil tankers near the Strait of Hormuz.

IEA cuts oil demand outlook

"We expect growth in 2019 to be the weakest since 2016, following evidence of a slowdown in several major consuming regions and countries," according to the International Energy Agency. Demand growth estimates for 2019 were reduced by 65,000 barrels a day to 1M, while 2020 forecasts fell by 105K bpd to 1.2M. Cutting the figures for the second consecutive month, IEA's revisions will add pressure on OPEC and its allies to make deeper output cuts in November.

Trade optimism

U.S. stock index futures are looking to build on yesterday's gains, with Dow futures ahead by 244 points, and the S&P 500 and Nasdaq up 0.9% and 1.1%, respectively. President Trump said trade talks between U.S. and Chinese officials on Thursday went very well, assuaging fears about a potential lack of progress before another meeting later today. Many are also looking out for a currency agreement, which could lead the U.S. administration to rescind a tariff rate hike scheduled for Oct. 15.

Brexit hopes

Brexit negotiations have shifted wildly over the past week, starting with a public row between London and Brussels. Yesterday, things took a turn for the better, with Boris Johnson and his Irish counterpart saying they had found a "pathway to a possible deal," pushing the pound up 2%. Sterling climbed another 0.7% to $1.2523 this morning as EU chief negotiator Michel Barnier meets British Brexit Secretary Steve Barclay to pave the way for a deal at an Oct. 17-18 summit.

Moving past the Ghosn era

The board of French carmaker Renault (OTCPK:RNLSY) has voted in favor of ousting CEO Thierry Bollore, just days after partner Nissan (OTCPK:NSANY) chose a new chief executive. It's a sign the automakers are working in sync to move past the Carlos Ghosn era and repair their troubled alliance. Resolving differences is a prerequisite to reviving any merger discussions with Fiat Chrysler (NYSE:FCAU), which were scrapped this year after Nissan failed to back the transaction.

FAA failed to properly review MCAS system

The Joint Authorities Technical Review, commissioned by the FAA in April to look into the agency's oversight and approval of the anti-stall system on Boeing's (NYSE:BA) 737 MAX, did not have great things to say in its latest findings. "MCAS was not evaluated as a complete and integrated function in the certification documents that were submitted to the FAA," the panel of air safety regulators said in a 69-page report. "The lack of a unified top-down development and evaluation of the system function and its safety analyses, combined with the extensive and fragmented documentation, made it difficult to assess whether compliance was fully demonstrated."

Vaping illnesses climb upward

A deadly lung illness linked to vaping has now taken the lives of more than two dozen people nationwide, according to the CDC. 219 probable new cases were diagnosed over the last week, bringing the total number of patients to 1,299, but health officials still don't know what's making people sick. Of the cases where doctors know what patients were using, roughly 76% of them said they vaped THC, while 13% said they exclusively used nicotine.

Walmart U.S. gets new CEO

The chief executive of Walmart's (NYSE:WMT) U.S. operations, Greg Foran, announced he will be leaving the company early next year and will be replaced by the head of its Sam's Club warehouse chain unit, John Furner. Foran's departure is likely to be considered a blow for Walmart given the New Zealand native is credited with turning around the retailer's American business by focusing on improving existing stores. Walmart reported 20 quarters of comparable sales growth under his leadership.

Thursday's Key Earnings
Delta (NYSE:DAL) -1.5% on light profit guidance.

Today's Markets

In Asia, Japan +1.2%. Hong Kong +2.3%. China +0.9%. India +0.7%.
In Europe, at midday, London +0.3%. Paris +1.1%. Frankfurt +1.8%.
Futures at 6:20, Dow +0.9%. S&P +0.9%. Nasdaq +1.1%. Crude +2% to $54.61. Gold -0.2% to $1498.40. Bitcoin -1.4% to $8390.
Ten-year Treasury Yield +2 bps to 1.68%

Today's Economic Calendar

8:00 Fed's Kashkari Speech
8:30 Import/Export Prices
10:00 Consumer Sentiment
1:00 PM Baker-Hughes Rig Count
1:15 PM Fed's Rosengren Speech
3:00 PM Fed's Kaplan: Monetary Policy


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