Saturday, May 28, 2016
Weekly Indicators for May 23 - 27 at XE.com
- by New Deal democrat
My Weekly Indicators post is up at XE.com.
Against a number of improvements, there are several signs that the consumer may be weakening.
Friday, May 27, 2016
Refinancing is dead: a generation of Hard Times will continue until secularly real wages improve
- by New Deal democrat
On Monday I gave what I think is a reasonable roadmap to the next recession. I wanted to follow up a little.
The post from nearly 10 years ago was entitled, "Are Hard Times Near? The great decline in interest rates is ending." The theory is right in the title. Since the 1970s, real average hourly earnings had declined. Average Americans coped by spouses entering the workforce, by borrowing against appreciating assets, and by refinancing as interest rates declined.
By 1995 the spousal avenue peaked. Borrowing against stock prices ended in 2000. Borrowing against home equity ended in 2006. When interest rates failed to make new lows, the consumer was tapped out, and began to curtail purchases. A recession began - and its effects have lingered and lingered. Hard Times were indeed near.
Here is a graph from 1981 of mortgage rates and 10 year treasuries:
In that article in 2007, I wrote that the consumer might yet have one more chance to refinance debt. In fact after the recession it turned out there were two: in 2009 and again in 2013. Ten year treasuries made a 60 year+ low in 2013 at 1.50%. Even if treasuries, and mortgage rates tied to them, make a new low, the floor is somewhere north of 0%. That -1.5% decline in a mortgage payment on a $250,000 house would be $3750 a year, or a little over $300 a month. That's the most extreme case. Even if interest rates make new lows, households that refinance are likely to see more on the order of $100 or $200 per month of freed up cash -- not enough to power much consumer spending.
Yesterday Molly Boesel of Core Logic confirmed this, writing in their blog
Because a refinance isn’t free, a simple rule of thumb is to add 100 basis points to the current market mortgage rate as the rate at which borrowers would have an incentive to refinance.... According to the chart [bleow], most borrowers hold mortgages with rates up to 4.50 percent, with 62 percent of mortgages and 72 percent of UPB in this range.
If mortgage rates rise as predicted, we will certainly see refinancing volumes fall in 2016. Note there is a small share of outstanding mortgages with interest rates of about 300 basis points or more above the current market rate.
Currently nominal wage growth is running at about 2.5% YoY. Real wages have been boosted in the last 2 years by collapsing gas prices. Once that is over, what happens next? Even 2% YoY inflation eats up nearly all of consumers' wage growth. A 3% YoY inflation rate means real wages decline.
So the bottom line is, we are already in a period - a period that I expect to last an entire generation - where real gains by average Americans won't be available from financing gimmicks, but must come from real, actual wage growth. At the moment I see little economic or political impetus to make that happen, even though average Americans understand via their wallets the issue all too well. Eventually it will happen, but I believe between now and then is another recession, one that I fear is likely to be worse than the 2008-09 recession because it is likely to include a spasm of wage-price deflation.
Thursday, May 26, 2016
After the Fall, Target is a Clear Buy
All investments involve risk. So does this one. Please talk with an adviser before buying this stock. And, as always, remember that I could be wrong about this.
Last week, Target stock fell from ~83.5 to 65.5, or 21.5%. This absolute percentage amount is over the 20% level reserved for bear markets. Several facts from the 1Q results caused the drop. Y/Y sales declined 5.4%, which was more concerning since same store sales increased slightly over 1%. Overall growth was the lowest since 2014. Most concerning to analysts was the retailer’s forward guidance, which target projected at $1.10-$1.20 while analysts were forecasting $1.36. But the report has hardly all negative. Digital comparable sales increased 23%. And the same store sales figures are encouraging, especially for a retailer Target’s size. Most importantly, the sell-off made Target attractive from a valuation level: their current PE 13.12 and their forward PE is 12.33
This drop occurred during a weak first quarter retail environment. In the latest GDP report, personal consumption expenditures increased a disappointing 1.9% Q/Q. Real retail sales were flat for the January-March period. This caused disappointing first quarter fiscal results that led to a 14% drop in the retail sector ETF (the XRTs). And retail executives were very circumspect in their first quarter earnings calls. But several recent statistics could indicate the 1Q malaise is over. The latest 1.3% rise in retail sales is very encouraging. Analyzed in isolation, this release could be viewed as statistical noise. But the recent 16.6% rise in new home sales shows the U.S. consumer is more than willing to spend, potentially foreshadowing a much stronger 2Q GDP result.
It’s important to place Target’s quarterly results into a longer time frame. Target’s total revenue has fluctuated between $72.5 and $73.7 billion over the last 5 years. COGS and operating expenses have been consistent, indicating the company has control of expenses. EBIT fluctuated between 8.89% and 10.67% since 2010. And they have reported positive earnings in all but 1 of the last 5 years. This is a consistent long-term performer that, so far, simply experienced a bad quarter.
There are two potential market scenarios going forward; either makes Target a buy. The company is a discount retailer, which naturally attracts shoppers during economic slowdowns. In fact, their gross revenue increased $9.25 billion between 2007 and 2009. And if the economy continues growing slowly, they’re still a buy. They have solidly positioned themselves as a discount store that is attractive to higher-end shoppers. A recent Facebook meme perfectly captured this sentiment: “Target: where you’ll pay an extra $5 to not be seen at Wal-Mart.” The stock is trading at the bottom of their 52-week range with a 3.23% dividend yield and a 41% pay-out ratio. The company also has a buy-back plan in play. These factors add up to a great buying opportunity.
Credit tightening as a leading indicator for recession
- by New Deal democrat
I've written about several legitimate bearish concerns in the last couple of weeks. First of all, the inventory to sales ratio is one that has frequently (but not always) been associated with recessions. Secondly, transportation of all sorts is solidly negative YoY - even against poor comparisons. Since goods have to be transported to market somehow, this confirms ongoing weakness -- not just of commodities, but to a lesser extent of finished goods as well.
A third legitimate bearish concern is credit tightening. Unfortunately I failed to bookmark the article and I can't find it now, but recently several researchers (from a regional Fed?) published a paper suggesting that expansion and contraction of credit conditions tended to drive economic activity (iin the form of commerical loans) with a lead time of about 18 months. Here's their graph:
One important limitation of this series is that there is less than 30 years of data, and 3 recessions.
This limited data sample does indeed suggest that net tightening of credit is a long leading indicator for recession (although note that we aren't yet at levels of tightening associated with the onset of either of the past 3 recessions).
But what drives tightening? Is it an independent variable, or is it in turn driven by something else? Does it give us new information, or just confirm other information?
My suspicion is that credit tightening is a reaction to a decline in interest rate spreads, and a deceleration of corporate profits. Banks make less profit on loans as the spread between short and long term interest rates decline, and as they see corporate profits stalling, it would be reasonable to take less risk.
And that is exactly what we see. Here is the spread in yield between 2 and 10 year treasuries (blue) and credit largesse by banks (red, inverted):
A decline in yields between short and long term maturities has reliably led to a deceleration in the expansion of credit by banks, with a lag of between 12 to 24 months.
Here are corporate profits vs. credit tightening:
What we see is that the increase in credit loosening peaks before profits, but conversley an outright decline in corporate profits signals a net tightening (i.e., crossing from easing to tightening) in credit availability, usually with a short lag on the order of 1 quarter.
So credit availability does appear to be a leading indicator, but it may be mainly confirmatory of the yield curve and interrelated with corporate profits.
Tuesday, May 24, 2016
2.9 cheers for new home sales!
- by New Deal democrat
As you probably already know, April new home sales blew out to the upside, making a new 8 year high at 619,000 annualized. *If this holds up,* it is very important positive economic news, since new home sales tend to peak even before housing permits, so much so that they are more of a mid-cycle indicator than a long leading indicator! In fact, it would be the single most positive news of the year to date. Here's the updated graph from Calculated Risk:
But that *if* is very important. New home sales tends to have upside or downside outliers once or twice a year. And large revisions to those outliers are the norm. For example, August 2014 was originally reported at 504,000, but the next month was revised down to 466,000.
So it remains a significant possibility that this months blowout number will be revised down, and yes possibly as much as 70,000, which would put it under February 2015's previous high.
So, 2.9 cheers! Subject to revision.
All forms of transportation stunk in April
- by New Deal democrat
While I continue to be mildly optimistic about the economy for the remainder or this year, there are some legitimate pessimistic arguments. I've discussed the inventory to trade ratios earlier this week. The second such pessimistic metric is transport.
Every week I report on rail data, which started out positive this year, and then fell off a cliff again in March and April:
It's worthwhile, however, to break out rail further by dividing between intermodal units (which tend to be manufactured goods) and carloads, which tend to be commodities like coal, mineral ores, and oil.
Here are carloads. These are absolutely awful:
Here are intermodal lunits. Negative, but not so awful:
But while rail daa has the advantage of being reported weekly, it is worthwhile to see whether or not other forms of transportation are confirming the signal.
So let's turn first of all to trucking. Here, the Cass Trucking Index is reported at about the middle of the subsequent month, so this week we got the April report. Here's the graph:
While April improved over March (not surprisingly given seasonality), both March and April are well below last year's numbers, roughly in keeping with the intermodal decline in rail.
Today we got West Coast port traffic (h/t Calculated Risk). That also declined in April:
Exports are more raw materials, and imports are more intermodal consumer goods.
So both shipping and trucking are confirming the negative signal from rail:
1. On a global scale manufacturing has been negative.
2. The commodity collapse - at least in terms of commodities supplied - is continuing. I suspect that commodity *prices* have stabilitzed because output declines are no longer outpacing supply.
Bonddad Tuesday Linkfest: US Mexico Trade
Trump has used clearly racist language to describe Mexicans, who happen to be a one of our largest trading partners.
Monday, May 23, 2016
A roadmap to the next recession
- by New Deal democrat
This is up at XE.com.
By the way, the template I am using now is the same one that enabled me to see the last recession approaching a year before it struck.
Bonddad Monday Linkfest: Steady Corporate Performers, NY and Atlanta Fed Nowcast; Retail Sector Hurting
NY Fed Gets Into the "Nowcasting" Business (NY Fed)
Atlanta Fed's Nowcast (Atlanta Fed)
“a very strong start to the quarter in February was overcome by softer-than-expected pre-Easter business and then a further deterioration in April versus our plans” —Kohls CEO Kevin Mansell (Department Store)
“post Easter sales and traffic trends softened noticeably consistent with what you’ve heard from many of our competitors.” —Target CEO Brian Cornell (General Merchandise)
“From a macro perspective, we did experience a deceleration in trends through the quarter” —L Brands CFO Stuart Burgdoerfer (Victoria’s Secret)
Daily Chart of XLYs
XLY Advance Decline Line
Two Month Charts of the Largest XLY Members
Daily Chart of the Retail Sector ETF
Sunday, May 22, 2016
Saturday, May 21, 2016
Weekly Indicators for May 16 - 20 at XE.com
- by New Deal democrat
My Weekly Indicator post is up at XE.com.
Probably largely due to renewed hawkish comments fro the Fed, the ghosts of 2015 have made a new apparition.
Friday, May 20, 2016
Bonddad Friday Linkfest: Energy Inflation and the Fed's Dove-Hawk Scale
The Consumer Price Index for energy declined 8.9 percent over the year ended in April, driven by a 13.8-percent decrease in gasoline prices. Prices for natural gas (-6.5 percent) and electricity (-2.1 percent) also contributed to the decline. Prices for other motor fuels, fuel oil, and propane, kerosene, and firewood were also down for the year, but together only make up 3.2 percent of the broader energy index.
Thursday, May 19, 2016
Kroger, On A Hiring Binge, Is A Buy
This idea involves risk. Talk to your financial adviser before doing anything. Also, I could be wrong about this.
The current rally – which started in 1Q09 -- is getting a bit long in the tooth. Not only is technical analysis arguing against purchasing equities, so is the current earnings environment, where overall corporate profits have declined in 4 of the last 5 quarters. Finally, recent economic numbers, such as last months’ below estimate 160,000 job gains or the weak 1Q GDP print – add to the concern. While recession calls are premature, the macro-environment is weak.
At minimum, stock analysts should look for companies in economic sectors with steady growth profiles such as the food and beverage sectors:
In the last 20 years, there are only two periods of contraction, each lasting less than a year. These sales are the backbone of the consumer staples sector, represented by the XLP ETF. Below are three charts that show this ETF’s technical picture:
Although both the daily chart (top chart) and weekly chart (middle chart) recently printed negative candles, they remain in uptrends. The ETF’s advance/decline line (bottom chart) is rising.
The Kroger Company is the largest grocery store by market capitalization; it is slightly over 3 times the size of its nearest competitor Whole Foods. Kroger’s growth is consistent: their 5-year average revenue growth rate is 6%-7%, while the 10-year average is a solid 6%. Due to razor thin net margins that average between 1%-1.5%, the company needs to aggressively manage its operations. Thankfully, their cash conversion cycle dropped from 10.75 days in 2010 to 7.28 in 2015, their inventory turnover ratio has been a consistent 14-15 for the last 4 years and the days of inventory on hand has been a steady 24.2-25.2 since 2012. These numbers show a strong organization-wide discipline, which the company’s thin margins and hyper-competitive sector require.
A stock trading near a 52-week low needs a buying catalyst. Thankfully, the company just provided one:
Supermarket chain Kroger is going on a huge hiring spree. Its family of stores is slated to hire people for 14,000 full-time positions, the company announced Tuesday.
Kroger said it will hold interviews across the U.S. on May 14 to fill the positions. Interested candidates can apply online and then show up at a location on Saturday for the interview.
“We have openings across the country for friendly, hard-working associates to join our team,” Tim Massa, Kroger’s group vice president of human resources and labor relations, said in a statement.
“We are looking for people who are passionate about making a difference for customers and communities—and want to do it in a fun, team environment with great benefits and advancement
opportunities.”
Next to COGS, labor is the company’s biggest expense. The only reason they would increase their workforce at this pace is if they already had the sales reported or strongly believed they were coming. This is especially true in an environment where a larger number of states and municipalities are increasing the minimum wage. There’s no other explanation for a hiring wave of this magnitude.
Let’s face it: groceries stores lack the sizzle of the next “big thing.” They are boring, stodgy businesses that perform a basic function for their communities. But Kroger is a dependable performer that has an impressive control over their operations. Their current price level is attractive and their recent hiring announcement indicates sales growth is probably on the way.
Why hasn't increased household formation led to increased housing construction?
- by New Deal democrat
Tim Taylor has an interesting article about "What was different about housing this time?" Specifically, why has housing in both building terms and as a share of GDP risen so slowly since 2009.
To cut to the chase, he writes that while prices have been increasing:
There are two possible categories of reasons for the very low level of residential building since 2009. On the supply side, it may not seem profitable to build, given what was already built back before 2008 and the lower prices. On the demand side, ... the demand for housing is tied up with the rate of "household formation"--that is, the number of people who are starting new households..... The level of household formation was low for years after 2009 ........
Together, the declines in household formation and homeownership contributed to the decline in residential expenditures as a share of GDP.
As an initial matter, I again note that it is important not to overlook the surge in all-cash purchases of large houses by foreigners - who are hedging their bets and/or shielding financial assets - since 2009.
But what caught my eye was Taylor's graph showing household formation:
It certainly *was* low after 2009 - until 2015, when it rose sharply, to an annualized rate of 1.750 million.
And now look at housing starts for the last 10 years:
Household formation and housing starts tracked reasonably closely from 2009 through 2014, but the relationship completely broke down in 2015, with about 600,000 more households formed than new houses being built.
It strikes me that this may be an important part of the spike in median asking rents since the beginning of 2015:
To say that it is puzzling that home builders have not addressed this surge in demand for starter housing is an understatement. It is probably one of the two biggest imbalances in the entire economy (along with stagnant wages vs. record profits). This isn't just an academic concern: increasing rents may have been vacuuming up nearly all of consumer gas savings for 1/3 of the populatioin. and their impact on inflation may be leading the Fed to an important policy mistake which could bring on the next recession.
Bonddad Thursday Linkfest; Low Productivity, No Recession (yet);
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.
So why aren’t we seeing another productivity boom? The difference between now and the last tech boom is that, in the mid-1990s, businesses throughout the economy used those new technologies to change how and what they produced. They became much more efficient and spread their reach. In the more recent tech boom, a lot of the innovation and new products are directed at our leisure time, which may enrich our lives, but doesn’t have the same groundbreaking effect on how businesses operate.
US economic growth remains sluggish, hinting at the possibility that a new recession may be near. But the numbers don’t align with a pessimistic intuition. The probability is extremely low that April marked the start of an NBER-defined downturn, based on published reports to date. Projecting a broad set of indicators into the near-term future suggests that the US will continue to sidestep a macro slump. Yes, the outlook could deteriorate if the incoming numbers stumble. But for the moment, recession risk remains low.
In fact, the prospects look encouraging for a modest rebound in economic activity in the second quarter, based on the Atlanta Fed’s latest nowcast. Although yesterday’s GDPNow estimate ticked down to a projected 2.5% increase for Q2 (as of May 17), that’s still a solid bounce higher from Q1’s tepid 0.5% advance. Forecasts aren’t written in stone, but the current forecast offers support for expecting some degree of improvement in output after a disappointing Q1.
Foreign risks
Inflation
Employment
Brexit
Market Expectations
Wednesday, May 18, 2016
Aside from a shortage in starter housing for Millennials,there is NOinflation
Yesterday's CPI report seems to be read as potentially justifying an interest rate increase in June. For example, here's Professor Tim Duy, on Fed hawks:
Inflation rose on the back of higher gas prices. Headline CPI gained 0.4 percent, although core rose a more modest 0.2 percent. Core CPI inflation is hovering just above 2 per cent....Fed hawks will be nervous that rising gas prices will quickly filter through to core inflation; doves will remind them that the Fed's target is PCE inflation, which remains well below 2 percent.
As to his own opinion, he says:
I don't think June is a go; the data isn't quite there yet.
And here is Yian Mui of the Washington Post:
The solid [consumer inflation] data helps bolster the case for the Federal Reserve to raise binterest rates at its next meeting in June.....Fed officials have long said that they expect inflation to pick up once the effects of the stronger dollar and low oil prices dissipate. Although the central bank relies on separate data to calculate price increases, Wednesday’s report on consumer costs appears to support the central bank’s claim.
Whether or not the Fed is listening, the fact is that yesterday's inflation data does no such thing.
Consumer prices less shelter are only up +0.1%. Not month owner month, but Year over Year! This is one of the lowest rates in the entire 75 year history of the series:
Here's a close-up of the last two years just to drive home the point:
If housing really were "hot," if people were buying houses with reckless abandon no matter what the price increase (like 12 years ago), yes there would be a basis for raising rates. But that is not what is happening at all.
Despite the fact that there are now or will shortly be more Millennials age 18-35 than Boomers:
The entry level housing that they need (red in the graph below) is not being built enough:
This is confirmed by the relative lack of housing inventory on the market:
and the near record low vacancy rates for apartments:
and the soaring rents:
Since rental prices are up sharply due to low vacancies and a dearth of new entry level construction, there is simply no excuse for the Fed to raise rates. In fact, raising rates will only make the multi-unit housing shortage - and the spike in rents - more acute, as the below graph of YoY changes in the Fed funds rate (blue, inverted so that an increase shows as a downward move) compared with the YoY% changes in housing starts (red) shows:
Quiite simply, an increase in interest rates has historically led to a decrease in housing construction:
Except for the housing supply shortage, there IS NO INFLATION. One of the two most likely causes for the next recession will be if the Fed perversely raises interest rates despite these facts.
Update: Here is one important reason for outsized median home price appreciation, and why builders find it more lucrative to focus on the high end market. Chinese all-cash buyers:
Chinese nationals have become the largest foreign buyers of US property after pouring billions into the market in search of safe offshore assets, according to a study.A huge surge in Chinese buying of both residential and commercial real estate last year took their five-year investment total to more than $110bn, according to the study from the Asia Society and Rosen Consulting Group.
Bonddad Wednesday Linkfest: Minimum Wage Edition
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.
When the burger chain reported an increase in comparable sales for the third straight quarter late last month, CEO Steve Easterbrook said that the positive growth was in part linked to better employee benefits and higher wages.
Easterbrook said lower employee turnover and higher customer satisfaction were linked to employee compensation package improvements.
"The improvements we made to our compensation and benefits package to employees in U.S.-company operated restaurants, along with expanding [the tuition assistance program] Archways to Opportunity ... have resulted in lower crew turnover and higher customer satisfaction scores," Easterbrook said in a call to Wall Street analysts, Fortune Reported.
It is here in which the empirical research has been largely consistent, as summarized by economists Dale Belman and Paul Wolfson in a recent prize-winning summary of the reams of analysis of minimum wage increases:
[Moderate] increases in the minimum wage raise the hourly wage and earnings of workers in the lower part of the wage distribution and have very modest or no effects on employment, hours, and other labor market outcomes. The minimum wage can then, as originally intended, be used to improve the conditions of those working in the least remunerative sectors of the labor market. While not a full solution to the issues of low-wage work, it is a useful instrument of policy that has low social costs and clear benefits.
Here’s how Alan Krueger, an economist whose path-breaking work on minimum wages has deeply influenced economists and policy makers, put it in a recent piece:
When I started studying the minimum wage 25 years ago, like most economists at that time I expected that the wage floor reduced employment for some groups of workers. But research that I and others have conducted convinced me that if the minimum wage is set at a moderate level it does not necessarily reduce employment. While some employers cut jobs in response to a minimum-wage increase, others find that a higher wage floor enables them to fill their vacancies and reduce turnover, which raises employment, even though it eats into their profits. The net effect of all this, as has been found in most studies of the minimum wage over the last quarter-century, is that when it is set at a moderate level, the minimum wage has little or no effect on employment.
Alan goes on to point out that “…a $15-an-hour national minimum wage would put us in uncharted waters, and risk undesirable and unintended consequences.”
Wendy’s (WEN) said that self-service ordering kiosks will be made available across its 6,000-plus restaurants in the second half of the year as minimum wage hikes and a tight labor market push up wages.
It will be up to franchisees whether to deploy the labor-saving technology, but Wendy’s President Todd Penegor did note that some franchise locations have been raising prices to offset wage hikes.
McDonald’s (MCD) has been testing self-service kiosks. But Wendy’s, which has been vocal about embracing labor-saving technology, is launching the biggest potential expansion.
Wendy’s Penegor said company-operated stores, only about 10% of the total, are seeing wage inflation of 5% to 6%, driven both by the minimum wage and some by the need to offer a competitive wage “to access good labor.”
Tuesday, May 17, 2016
Good news and bad news in this morning's data
- by New Deal democrat
We got two pieces of good news and two pieces of bad news this morning.
Let's start with the good news: Industrial production jumped +0.7% - only the 4th monthly increase in 18 months (blue in the graph below). While mining continued to decline, manufacturing (red) increased to tie its January record:
Again, adding to the evidence that the shallow industrial recession is bottoming out.
The second piece of good news is that real retail sales, and real retail sales per capita set new records:
Since this is a leading indicator, it eases the concern that a recession might happen this year.
Now the bad news. Consumer inflation ran "hot" in April, with owner's equivalent rent continuing to be the most important driver, although energy prices and medical device prices were an important assist:
Along the same lines, while housing permits and starts increased, they are still below last spring's post-recession highs, even excluding the northeast region (blue below) that includes the NYC distort ions from last spring:
While single family house permits came in only 2,000 below their December post-recession high, multi-unit housing continued to tank. Also, the February new high in single family permits was revised away:
There is a crying need for starter homes, but why should builders build them when there is so much more money in all-cash sales of high-end houses to well-off Chinese buyers?
So, two takeaways from this morning's data:
1. Immediate recession risk is receding.
2. There is absolutely zero reason for the Fed to raise rates in the inflation number, unless punishing prospective young American homebuyers is their objective.
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)
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.
Industrial Production Market Sectors
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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