The Market Radar

We anticipate, monitor, and comment on market moving global economic and geopolitical issues.  No dark side brooding, no wanting the world to end, no political rants.  Traders, investors, policymakers, or market observers can’t  afford to ignore us.

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The Decline of Petrodollars

Last week we pointed out that the crash in oil prices will reduce global liquidity as the revenue of oil exporters falls dramatically.

This raises an interesting question: as petrodollars come out and flows to financial markets are reduced, shrinking the pool of global liquidity, and as the real income of oil consumers increase, will the net result be marginally weaker financial markets and stronger global economic growth?

These countries recycle their oil earnings back into the global financial markets,  including the purchase of U.S. Treasury securities.   The oil exporters, including Russia and Norway, are the third largest foreign holders of Treasury securities, behind China and Japan.

BNP Paribas reports that this year the flow of  petrodollars from energy-exporting countries into world markets will, for for the first time in almost 20 years,  turn negative. 

The chart below illustrates this,  showing petrodollar capital flows peaked in 2006, which contributed to Alan Greenspan’s bond market conundrum and the Fed’s inability to affect long-term interest rates.  The forrmer Fed chairman attributes capital inflows as one of major factors causing the credit and housing bubble.  

Stay tuned.

Dec19_PetroDollars(click here if chart is not observable)

Posted in Crude Oil | Tagged , , | 2 Comments

A new paradigm for oil? – FT

In the middle of 2014 the price of oil was more than $100 a barrel; now it is hovering near $60. The FT’s Frederick Studemann asks Energy Aspects’ Amrita Sen and FT commodities editor Neil Hume whether low prices will become a permanent feature.

For more video content from the Financial Times, visit http://www.FT.com/video

(click here if video is not observable)

Posted in Crude Oil | Tagged , , , | 2 Comments

SPY Key Support

Note the key level of technical support on the S&P ETF, SPY, at the 195-ish area.  This is where the 50% retracement of the Oct 15 – Dec 5 rally and the 200-day moving average meet.  A move to this level would represent a 6 1/2 percent correction from the recent high.   Stay tuned.

Dec16_SPY(click here if chart is not observable)

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US Sector ETF Performance – December 16

ETF_DayETF_YTD(click here if charts are not observable)

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Daily Risk Monitor – December 16

Click on table to enlarge and for better resolution

RiskMon_1RiskMon_2RiskMon_3(click here if table is not observable)

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Putin wrestles with rouble tumble – FT

The rouble has moved almost 20 per cent in half a day. Lex’s Joseph Cotterill talks to Neil Buckley, eastern Europe editor, about the choices facing Russia’s President Vladimir Putin and the implications for the Russian economy.

Read the global perspective on world events
http://www.ft.com/world

(click here if video is not observable)

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US Sector ETF Performance – December 15

ETF_DayETF_YTD(click here if charts are not observable)

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Daily Risk Monitor – December 15

Click on table to enlarge and for better resolution

RiskMon_1RiskMon_2RiskMon_3(click here if table is not observable)

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Falling oil prices – a global tax cut – FT

Global oil prices have fallen more than 40 per cent in the past six months to hit their lowest level in almost five and a half years. Chris Giles, economics editor, and Neil Hume, commodities editor, discuss what the fall means for the global economy.

Read the global perspective on world events
http://www.ft.com/world

(click here if video is not observable)

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US Sector ETF Performance – December 12

ETF_DayETF_WeekETF_MonthETF_Q4ETF_YTD(click here if charts are not observable)

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