on August 5, 2011
To top off the bad news, Germany today reported worse then expected industrial output: production dipped 1.1% against analysts expectations of a 0.1% gain. Germany, France and Spain are to talk markets today as Japan and China are calling for a global coordination to quell the market turmoil.
Markets have surely summoned the politicians and its is expected that whatever politicians do may bring some relief, perhaps into next week.
Some survey of other news:
Oil
Analysts are slashing global oil demand estimates. Perma-bull Barclays Capital says ”Given the general state of the macro-economy, the state of oil demand does not seem particularly healthy”. sees oil demand at 1.34 million bpd versus 1.7 million it saw 2 months ago.
S&P 500 forecasts
Is it time to be contrarian? Wall Street looks united that S&P 500 will rally. “Chief strategists at 13 banks from Barclays Plc (BARC) to UBS AG (UBSN) see the benchmark measure of American equity surging 17 percent through Dec. 31, the average estimate in a Bloomberg survey.”
Copper
Too many miner strikes and bad weather may cause copper supplies to stagnate and put a possible pricing floor for the metal. The allowance analysts have set for possible supply losses was 7.5% but Christine Meilton, analyst at CRU Group, says that’s not enough. “Our disruption allowance in January was 7.5 percent for mined copper. That’s not going to be nearly quite enough, it’s looking more like 8 to 9 percent,” Meilton said.
Gayle Berry, analyst at Barclays Capital, says “So far this year we estimate that more than 420,000 tonnes of production has been lost due to disruption,” Berry said. “It’s becoming increasingly evident that we don’t have much left to play with in the allowance. If we carry on like this it’s going to be difficult to see production growing at all this year.”
Meanwhile some see copper demand rising from renewable energy sector. Again Berry: “I see copper demand and copper use in applications increasing in automotives. For your hybrids and electric vehicles you really do need (wiring) to be copper, because you need the most efficient energy transfer mechanism you can get.”
Coal
Prompt physical coal prices dipped by around 10 cents on Thursday with few fresh trades reported. “Everything seems to be collapsing apart from bonds, oil fell $3 but coal has ignored it all,” one European trader said.
Even though the underlying mine held up well, just like some gold miners, coal names got hammered yesterday. Walter Energy in particular saw its market capitalization evaporate yesterday: valued at $12 billion just 2 weeks ago in buy out, Walter is now at $4.9 with a forward PE of 4.7. Now that Peabody buyout of Australia’s Macarthur may be in jeopardy, could the mighty BTU turn domestic? Nor has Console made a move to enhance some of its slim met-coal portfolio? Who knows.
Dry Bulk
Dry bulk ship owners are bracing for bankruptcies if global economy tailspins. “If there were to be a double dip recession in both the USA and Europe, then it would feel like the mother of all recessions for the dry bulk market,” said Khalid Hashim, managing director of the Thai-listed group Precious Shipping.
(sourced Marginal Evolution)
To top off the bad news, Germany today reported worse then expected industrial output: production dipped 1.1% against analysts expectations of a 0.1% gain. Germany, France and Spain are to talk markets today as Japan and China are calling for a global coordination to quell the market turmoil.
Markets have surely summoned the politicians and its is expected that whatever politicians do may bring some relief, perhaps into next week.
Some survey of other news:
Oil
Analysts are slashing global oil demand estimates. Perma-bull Barclays Capital says ”Given the general state of the macro-economy, the state of oil demand does not seem particularly healthy”. sees oil demand at 1.34 million bpd versus 1.7 million it saw 2 months ago.
S&P 500 forecasts
Is it time to be contrarian? Wall Street looks united that S&P 500 will rally. “Chief strategists at 13 banks from Barclays Plc (BARC) to UBS AG (UBSN) see the benchmark measure of American equity surging 17 percent through Dec. 31, the average estimate in a Bloomberg survey.”
Copper
Too many miner strikes and bad weather may cause copper supplies to stagnate and put a possible pricing floor for the metal. The allowance analysts have set for possible supply losses was 7.5% but Christine Meilton, analyst at CRU Group, says that’s not enough. “Our disruption allowance in January was 7.5 percent for mined copper. That’s not going to be nearly quite enough, it’s looking more like 8 to 9 percent,” Meilton said.
Gayle Berry, analyst at Barclays Capital, says “So far this year we estimate that more than 420,000 tonnes of production has been lost due to disruption,” Berry said. “It’s becoming increasingly evident that we don’t have much left to play with in the allowance. If we carry on like this it’s going to be difficult to see production growing at all this year.”
Meanwhile some see copper demand rising from renewable energy sector. Again Berry: “I see copper demand and copper use in applications increasing in automotives. For your hybrids and electric vehicles you really do need (wiring) to be copper, because you need the most efficient energy transfer mechanism you can get.”
Coal
Prompt physical coal prices dipped by around 10 cents on Thursday with few fresh trades reported. “Everything seems to be collapsing apart from bonds, oil fell $3 but coal has ignored it all,” one European trader said.
Even though the underlying mine held up well, just like some gold miners, coal names got hammered yesterday. Walter Energy in particular saw its market capitalization evaporate yesterday: valued at $12 billion just 2 weeks ago in buy out, Walter is now at $4.9 with a forward PE of 4.7. Now that Peabody buyout of Australia’s Macarthur may be in jeopardy, could the mighty BTU turn domestic? Nor has Console made a move to enhance some of its slim met-coal portfolio? Who knows.
Dry Bulk
Dry bulk ship owners are bracing for bankruptcies if global economy tailspins. “If there were to be a double dip recession in both the USA and Europe, then it would feel like the mother of all recessions for the dry bulk market,” said Khalid Hashim, managing director of the Thai-listed group Precious Shipping.
(sourced Marginal Evolution)
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