Bits n’ bites

January 20, 20249 Comments

Here’s another one of my “bit n’ bites” blogs, where I draw interesting notes from the various research analysts and papers I read.

Oil & Gas

If all shipping through the Red Sea moves around the Cape of Good Hope — S Africa — it’s an extra 1mbd in additional oil demand...BearTraps

THE EIA SAYS US NATURAL GAS STOCKPILES FELL 154 BCF LAST WEEK VS ESTIMATES OF -166 BCF. Crude Oil Inventories -1.5ml bpd vs -0.4 expected

Baby, its cold out there!

NAT GAS CHART – just coming into support

 

HOUTHI CHIEF: “WE ARE NOW IN DIRECT CONFRONTATION WITH USA, UK”. My blog last week addressed investing in times of war. Oil demand can increase, for one thing.

WTIC CHART – hanging out at support, early signs of bouncing off. WTIC is no longer in bear mode – which makes sense since the entire Middle East is in flames…

Earnings

Tied into my recent earnings vs stock market blog:

Earnings may be coming in a healthy levels, and the market’s performance in 2023 was perhaps  foretelling, as discussed in my last blog.

Fourth quarter earnings season is now underway, with 36 companies reporting.  We are well short of a critical mass at this point, but so far 89% are beating by an average of 7.57%. The growth estimate coming into earnings season is +1% (yoy), and if history is any guide that will improve to +4% or so. — Fido

Looking for value?

 

Fed policy:

WHEN and IF rates are cut (BearTraps Research): Fed Whisperer

Based on the Dec CPI and PPI, core PCE is projected to have been mild last month. The modelers who forecast this expect core PCE to rise 0.17% from Nov. This would lower the 12-month rate to 2.9%. The 3- and 6-month annualized rates would fall to 1.5% and 1.9%, respectively.

Fed “Hawk to Dove” Scale

Kashkari Logan  (no cuts)

Bowman (one cut)

Waller Musalem Mester Barkin Daly  (two cuts)

Bostic Powell Collins Williams Jefferson Kugler (three cuts)

Barr Harker Schmid Cook (four cuts)

Goolsbee (five cuts)

Wildfires & climate narrative

Nobody denies the need to engineer new environmental policies for our future. But we need to be aware of misleading & subjective narratives. Everyone’s trying to convince us of something. I repeat this continually in my blogs and books. That is…we need to develop a skeptical mind in investing, and in all aspects of life. Read Skeptic magazine or my book Smart Money, Dumb Money to help you become more aware. In this blog, I’ve posted many examples of these misleading narratives over the past few years (“transient inflation” talk in early 2021, “bear market is over” August 2022, etc).

Wildfires due to climate change?

B.C. woman sentenced for 2 arson fires south of Kamloops.

Suspect arrested in Maui arson incident that triggered massive wildfire.

Nova Scotia man charged for starting massive forest fire. At least 7 Liberals including Steven Guilbeault falsely blamed the massive wildfire on climate change.

Quebec Man Admits to 14 Forest Fires. Brian Paré admitting guilt to 13 counts of arson and one count of arson with disregard for human life. Last year, Gerald Butts attributed the forest fires across Canada to climate change. This narrative, echoed by several Liberal MPs, has been a key part of their environmental policy discussions.

9 Comments

  • Keith I love “playing/observing” in Natural Gas. As Brooke has stated it can be a widow maker.
    Regardless, I can understand you say it is coming “into support”, and RSI is nearing the 30 range. However here is where I seek some guidance.
    Equity charts show Nat gas as weaker typically until early Feb for a small bounce (maybe a quick trade there), but mid March before the strong seasonal play seems to arrive.
    How do you consider the seasonal trend vs the current technical perspective? Maybe just a quick play on a short bounce before settling back?

    Reply
    • Daddyo I am not buying nat gas yet. I am observing that it is coming into support, and – as you know- I would wait for a base and bounce before buying. That may occur in the coming seasonal buy period. The fundamentals – based on comments from Beartraps–may support that happening. Many sectors I talk about on this blog are for the watch list rather than buy-today candidates.
      I am legging into oil and related stocks–one step at a time. Seasonally- oil’s buy period starts in another month as well. But its clear that oil is holding, and even at the early stage of bouncing from, support.

      Reply
  • The cause of the fires, whether arsonists or Israeli space lasers, is not the reason that wildfires are more destructive. 2023 was the warmest year on the planet in recorded history. In the near future, there will be severe water shortages in many parts of the world, including North America. That’s not government propaganda, that’s reality. At some point, hopefully the light bulb goes on.

    Reply
    • Perhaps you missed the opening sentence – where I noted “Nobody denies the need to engineer new environmental polices for our future”.
      My point was not to “deny” the need to aid our planet’s health, so to speak. It was that politicians, or anyone pushing a pre-established agenda, will twist anything to sell their message. I have a video interview coming up with a special guest who is familiar with the Canadian environmental policies. It was eye opening re the lack of reality behind the ideological plans of steven guilbeault. He has, and will, say anything and twist anything to meet his highly unrealistic plan. One that, as you will hear in the video, could easily be changed to one that has a hope of working without creating hardship on Canadians. My point was that he and his cronies told us that these arson-caused fires were being “caused” by environmental change- they were not. One also has to wonder – what motivated these maniacs to light the fires. Were they trying to create an environmental catastrophe to escalate public opinion re the government imposed mandates? Just a question.
      I question all messages that are pushed at the public- investment themes, political policies, and so on. In this way, I have managed to avoid being caught up in market crashes and hype-stock crashes. That, along with other harmful narratives pushed in so many aspects of life.
      Hope that helps clarify my message.

      Reply
    • @Juan and Keith, Yeah, it is unfortunate how some politicians will grasp at anything to further their cause. But climate change is real. I agree with Keith that we really don’t know maniac-arsonists were thinking. It sure is harder trying to find the truth these days. For what it’s worth, I’m a conservative voter who still trust in our mainstream media, mostly.

      Reply
  • Keith,

    I am in the skeptic camp when it comes to the anthropogenic climate warming theory. Most people are not aware of the extent of natural variability nor do they fully understand the theory. The first part of the theory is that higher CO2 concentrations will cause higher temperatures due to the greenhouse effect. Most of us in the skeptical camp agree that there should be some small amount of warming due to the greenhouse effect. The theoretical increase is 0.7 degrees C for a doubling of CO2. The amount of warming from a doubling of CO2 is known as “climate sensitivity”. That is not very much as it will take close to 150 years for the doubling to occur. The alarmists agree and that is why the theory has a second part to it. The second part of the theory is that this small amount of warming will create a positive feedback effect as it will increase the amount of H2O, the most significant greenhouse gas by volume, in the atmosphere and that will cause greater warming. That is how the alarmists get up to warming figures north 3 degrees C for a doubling of CO2. It is too complicated to get into all the details here but all I can say is that part of the theory is highly dubious. In response to the other commentator I would point out that we have had very little warming, if any, to date even though CO2 concentrations have been rising rapidly since 1950. A generally accepted figure is that we have had warming of about 1.2 degrees C since 1880. However about 0.5 to 0.6 degrees of that occurred before 1950 when CO2 concentrations were not high enough to have any significant effect on temperature. We are in the modern warm period that started about 1850. Therefore we have had, at most, 0.7 degrees of warming in the last 70 years when rising CO2 concentrations may have had some effect. At that rate, climate sensitivity would be in the order of 1.4 to 1.5 degrees C. However, it is highly unlikely that amount of warming is caused by rising CO2 concentrations simply because it is highly unlikely that the natural warming that stated in started in 1850 suddenly stopped in 1950. If we assumed had the warming was half natural and half caused by rising CO2 concentrations, we would have warming of about 0.35 degrees warming for the last 70 years that was caused by rising CO2 concentrations and a climate sensitivity figure of about 0.7 degrees C. in other words, the amount of warming we have had since 1950 may be consistent with direct greenhouse gas effect but there is no sign that second part of the theory is correct. I will end by saying that increasing CO2 concentrations have had a tremendous positive effect as it has had a significant “greening” effect. This is well understood and documented but is never referred to in the media presumably because it is inconsistent with the global warming narrative.

    Reply
    • Thankyou Frank–you know much more about this topic than I.
      I try to relate via this blog that we have to be careful with crowdthink and “confirmation-biased truths”. Interestingly, way before it was “a thing”–I have been an avid supporter of environmentalism. Been that way for my entire life – and I am in my early 60’s!. Most of today’s Liberal climate change MP’s were not even sparks in their daddy’s eyes when I was a young volunteer with a group called “Resource Rangers”, cleaning up roadsides and learning about preservation, ecosystems and recycling. But I also believe that the radical, unrealistic totalitarian control approach endorsed by the Canadian government in cooperation with the WEF Reset agenda is not the right way to approach it. I have an interview with a western journalist coming up in 2 weeks that presents some interesting perspectives – and how utterly ridiculous and unrealistic the current policies are. Watch for it.

      Reply
  • I was wondering if CNQ at $83.33 is a good buy. This price looks like very good support. The only thing that could bring it down is a catalyst that would be negative for oil and gas such as a break below $70. Could you comment on the risk of this trade as well as the potential upside? Thanks.

    Reply
    • John I can’t comment on individual stock questions by readers on this blog. I will say that I like oil producers for the mid-termed trade

      Reply

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