Tuesday, May 17, 2016

Bonddad Tuesday Linkfest: Industrial Production Needs to Improve, Corporate Profits Lead, Goldman Ups Oil Price Target

On Thursday, May 26, we'll be hosting our regular monthly wrap-up of economic and market events.  You can sign up at this link.


Industrial Production Needs to Improve (Price Headley SA)

Also this week we'll get last month's industrial productivity and capacity utilization numbers. We desperately need a reversal of the strengthening downtrends from both. The market can shrug off a bit of downside volatility, but this deterioration has reached problematic levels.


The chart below shows measures of corporate health such as operating surplus, income, profits, and cash flow usually start falling 1 or 2 years before a stock market decline or the start of a recession. According to FactSet, the 1st quarter of 2016 was the fourth quarter of negative profit growth. This article evaluates profits as a leading indicator of the stock market and economy.
Goldman Ups Its Oil Price Target (FT)

Goldman Sachs is getting bullish on oil – sort of.

A supply deficit – driven by disruptions in Nigeria and robust demand – has led the US investment bank to upgrade its short-term outlook for oil, write Mehreen Khan and Neil Hume.

Goldman now expects WTI to average $45 a barrel in the second quarter of 2016, from an earlier March estimate of $35.


Oil Prices Daily




Energy Commodities 




XLEs Daily



XLEs/SPYs





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