31
Mar

Tuesday Morning – MR

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Market Sentiment Watch:

  • Expecting weak U.S. economic data all week. U.S. Covid-19 data will worsen near term. 
  • See comments on the PXD and PE joint letter to the Texas Railroad Commission below.
  • Overnight China announced better than expected, expanding, manufacturing activity with the official PMI at 52.0 vs expectations of 45.0 and 35.7 in February.
  • China Covid-19 data continue to improve although there is some back and forth here and China is set to begin reporting asymptomatic cases this week which may scare markets as the numbers move up again. European Covid-19 may be showing some signs of flattening.
  • The pace of treatment and vaccine development is picking up. A vaccine will still take longer but J&J has a candidate they say has a high degree of probability, will start human trials in September and could be ready for emergency use early next year. Reports from the hospital front however will worsen near term.
  • Goldman noted these three we think kind of obvious things for the market to really turn, warning they see it turning lower first: 1) US viral spread must slow (as we note a lot lately, the numbers will get worse before they get better), 2) there must be evidence that measures by the Fed and Congress are actually helping the economy, and 3) investor sentiment must "bottom out".

In today's post please find:

  • the early read on oil inventories (crude expected to build more than usual vs 5 year average but less than last year as throughput begins to really ebb),
  • comments on the TX RRC letter,
  • comments on U.S. oil storage  (current, 5 year, max storage, potential trajectory),
  • the very early read on natural gas inventories (early consensus calls for a pull in line with last week's number as expected),
  • comments and a cheat sheet MR,
  • and some other odds and ends.

Ecodata Watch:

  • We get Case-Shiller home prices at 9 am EST (no forecast, last read was 3.75),
  • We get Chicago PMI at 9:45 am EST (no forecast, last read was 49.0),
  • We get consumer confidence at 10 am EST (F = 120.0, last read was 130.7),
  • We get the EIA 914 monthly data at 12 pm EST.

In Today’s Post:

  1. Holdings Watch
  2. Commodity Watch
  3. Stuff We Care About Today – MR
  4. Odds & Ends

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30
Mar

Monday Morning

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Market Sentiment Watch:  Grim week ahead for Covid-19 numbers and economic data.

  • Covid-19 cases are rising as expected on an exponential growth profile. Expectations are one thing, seeing the U.S. death count double from 1,000 last Thursday to over 2,000 by last Saturday is a different matter. NY remains the U.S. epicenter and they see apex in 2 to 3 weeks.
  • Other U.S. hots spots are seeing similar growth tracks and the Administration extended social distancing guidelines through April 30th over the weekend.
  • There is also some good news on the Coronavirus fight front as multiple treatments and vaccines are being tested around the globe and some more areas are showing signs of slowing. Two thorough Covid-19 tracker links are located in the link list at upper right on the site.
  • On the economic front, we get March payrolls at weeks end. This will be a terrible looking number. At last check almost 1/4 of the U.S. is currently not working/getting paid to work.
  •      We also get factory orders. And consumer confidence, and the ISM numbers, and Chicago PMI ... it's going to be a tough week for data.

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In today's post please find:

 

Ecodata Watch:

  • We get pending home sales at 10 am EST (no forecast, last read was 5.2%)

The Week Ahead: 

  • Tuesday - Case-Shiller home prices, Chicago PMI, consumer confidence, EIA 914 monthly data,
  • Wednesday - ADP employment, ISM manufacturing, construction spending, car sales,
  • Thursday - Jobless claims, trade deficit, factory order,
  • Friday - Nonfarm payrolls, unemployment rate, average hourly earnings, ISM nonmanufacturing.

In Today’s Post:

  1. Holdings Watch
  2. Commodity Watch
  3. The Week That Was
  4. Stuff We Care About Today
  5. Odds & Ends

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29
Mar

Wrap – Week Ended 3/27/20

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Questions and comments under The Wrap will be addressed in the Monday post.

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There were no trades last week. The Blotter is updated.

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Be safe, stay home (or like us go to wide open spaces with no people), and wash hands.

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27
Mar

T.G.I.F

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Market Sentiment Watch: 

  • The House is supposed to pass the CARES (Coronavirus Aid, Relief, and Economic Security) Act today.
  • Covid-19 numbers for the U.S. overtook Italy and China yesterday in terms of identified cases. More poor headlines will arrive next week. Stay safe.
  • Last day of Spring Break around here and I am going to spend it with the interns grabbing some vital vitamin D while I can.
  • If you have questions please drop them in the comments section and I will check in from time to time and address. Thanks.

In today's post please find:

  • the natural gas review (in line number, basically now at the top end of our expected trough range),
  • the natural gas near term supply and demand cheat sheet (this week we were down in terms of supply on a YoY basis; LNG exports moved back to near record territory and US dry gas production continued to ebb),
  • the priority names list (new and improved),
  • and some other odds and ends.

Ecodata Watch:

  • We get Personal Income at 8:30 am EST (F = 0.4%, last read was 0.6%),
  • We get Consumer Spending at 8:30 am EST (F 0.2%, last read was 0.2%),
  • We get Consumer Sentiment at 10 am EST (F = 89, last read was 95.9).

In Today’s Post:

  1. Holdings Watch
  2. Commodity Watc​h
  3. Natural Gas Inventory Review
  4. Stuff We Care About Today - Priority names, VWDRY
  5. Odds & Ends

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26
Mar

Thursday Morning – FLMN, MR

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Market Sentiment Watch:

  • Senate passed the $2T+ Cares Act last night. It moves on to the House where a vote is likely at earliest on Friday. The word "Oil" is not in the bill as far as we can tell and as noted before the provision to refill the SPR was excised.
  • TSA says air traffic is currently at 10% of normal,
  • March new car and truck sales estimated to be down 35.5% YoY by Edmunds (car deals to be epic soon),
  • Unemployment claims in California alone are at 1 mm; today's jobless claims figure will be huge (see below) and next week's payrolls figure will take the first big hit ...
  • ... as will car sales, Chicago PMI, and potential construction sales and home prices.
  • Covid counts are going to look very bad next week as well as the U.S. case count will pass China's probably over the weekend and the reported death's count surpassed last night and appears to be just getting started. Covid statistics links are contained in the right sidebar of the site.  It's not all doom and gloom as there are several sets of treatments being tried now in advance of a vaccine and there does appear to be progress being made to source ventilators.
  • But basically, for the moment, things are pretty shuttered and oil demand is about to fall further off a cliff in the States, Europe, and India even as it begins to recover in China.
  • On the oil front Saudi/Russia continue to be fairly quiet relative to each other. The U.S. is in contact with Saudi via State and Energy Departments.  Clearly run cuts in the U.S. are around the corner.
  • On the natural gas side, winter is over for much of the country and this week is showing summer like temps across a broad swath of the south. Our office was heating early in the week and will have the AC on today. Once again we are happy to exit the heating masking season. Look for another short term supply/demand update in tomorrow's post.
  • Housekeeping Watch: I'll be in and out today, still on Spring Break but less so and it feels like summer here.

In today's post please find:

  • the oil inventory review (smaller than expected build, throughput was better than expected, production was reported as backing off which is positive in that EIA isn't simply marking it higher in the wake fo the recent reset, product demand was soft and will get softer; at this time inventory levels are fine, especially for distillates which are under stored and we note production has shifted to less gas and more distillate production),
  • the natural gas preview (bigger than last week, expect one or two more draws this season and a landing in the upper end of our expected target range for the year (1,800 to 2,000 Bcf),
  • comments and a cheat sheet update for FLMN (multiple price decks run, high implied yield, few trust their guidance at present but that's in the name right now and the balance sheet is fine and set to remain as such),
  • comments on MR's move to address lower oil prices (cut capex sharply but not changing the production guidance range).
  • and some other odds and ends.

Ecodata Watch:

  • We get jobless claims at 8:30 am EST (F = 2.51 mm, last read was 281,000),
  • We get 4Q19 GDP at 8:30 am EST (F = 2.1%, last read was 2.1%),
  • We get advance trade in good at 8:30 am EST (F = -$62.8 B vs last month's -$65.2 B).

In Today’s Post:

  1. Holdings Watch
  2. Commodity Watc​h
  3. Oil Inventory Review
  4. Stuff We Care About Today - FLMN, MR
  5. Odds & Ends

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