Markets were relatively quiet as a drop in energy shares offset speculation the Federal Reserve will keep rates lower for longer.
Commenting upon the Fed Minutes, for the first time since 2008 the FOMC considered risks to be “nearly balanced.” Perhaps the only concrete statement to make is the timing of a change in monetary policy is about as lucid as it was before the Minutes were released.
Regarding oil, there are many analysts who are predicting the oil rally of recent weeks is not going last. I generally disregard the “noise” and focus upon the geostrategic and geopolitical issues to for an opinion.
Perhaps the only comment I place any confidence in is the one made by OPEC’s General Secretary who has stated several times crude’s floor is around $50 and should slowly rise over the coming months. OPEC produces about 25% of the world’s crude.
Regarding the geostrategic/geopolitical environment, because of the lack of leadership, the Middle East is going from extreme violence to almost anarchism where the basic standard of human decency has been abandoned to Islamic fanaticism. Perhaps the only positive comment to make at least several Islamic states is forcefully confronting these abhorrent groups.
I will argue it is not if there will be a major supply disruption but rather when. To behead 21 Christians or burn alive 17 Kurdish soldiers are acts of barbarism not witnessed in over a century.
I cynically ask and quote Secretary of State Kerry’s March 2014 statement “You just don’t in the 21st century behave in 19th century fashion” as a symptom of the issue facing the western world. Violence and hatred has existed since eternity and will continue to exist until there is divine intervention to end such. Idealistic elitist language will only accentuate and incite the environment.
What will happen today? The LEI and Philly Fed are released so is weekly jobless claims.
Last night the foreign markets were up. London was down 0.03%, Paris up 0.47% and Frankfurt up 0.05%. Japan was up 0.36% and Hang Sang up 0.19%.
The Dow should open quietly lower as Germany rejected a proposal from Greece to seek an extension of its loan facilities from euro-area creditors. The 10-year is unchanged at a 2.08% yield.
