A Possible Disconnect

By: Kent Engelke | Capitol Securities

Until an early afternoon sell off, oil prices were around their highest levels of the year. Conversely, oil shares are lagging oil prices and are greatly underperforming. The divergence between crude and share prices does not last for long. Either crude is going to drop or oil equity prices are going to rally.

The reasons for the divergence are numerous. Electronic based trading firms are programmed to interpret a drop in inventories as bearish as such supports a rise in production that will later suppress prices. The belief is that OPEC will not continue with production cuts. Global oil demand will not meet expectations. Or because oil is not technology.

Speaking of technology, according to Bloomberg, the S & P 500 technology index is at its 50 day moving average. As noted several times recently, there has been a major transition out of everything but technology into technology, thus suggesting a very imbalanced market. The Trump trade has been unwound.

Can the following scenario unfold? A mega capitalized technology growth company disappoints, selling commences in the technology sector and funds gravitate to oil and the financials? As noted above, the divergence between crude prices and oil securities normally does not last for long.

Yesterday IBM profits fell short of expectations, the major reason for the 100 point decline in the Dow. Oil also fell about 3.5% on mixed inventory data [note: oil initially advanced on the statistics].

Last night the foreign markets were mixed. London was down 0.04%, Paris was up 0.75% and Frankfurt was unchanged. China was up 0.04%, Japan was down 0.01% and Hang Sang was up 0.97%.

The Dow should open nominally higher partially on the news that the crude producing countries reached an initial agreement to extend output cuts. The 10-year is off 4/32 to yield 2.32%.


New England Patriots rebuff CNN, NYT #FakeNews about White House event

By: Renee Nal | New Zeal

New England Patriots forced to correct the political hacks at NYT Sports

The New England Patriots thankfully corrected an outrageous, politically charged tweet by New York Times Sports which heavily implied that the New England Patriots rebuffed the White House, where they were honored for being the Super Bowl champions this week.

The fake photo continues to be posted all over Twitter.

The original tweet received almost 33,000 retweets at the time of publication:

The New England Patriots responded:

Not to be outdone, the highly partisan Eleanor Mueller of CNN Politics picked up the “news story” with the headline “The Patriots go to Washington — some of them, at least.”

She writes:

“In photos posted to social media Wednesday, the New England Patriots’ turnout at the White House this year seemed to be noticeably smaller than in 2015, when the team last visited the executive residence.

A side-by-side comparison of the teams on both occasions showed a visibly smaller contingent to visit President Donald Trump than former President Barack Obama — a difference first noted by The New York Times.”

But of course, that is just more #FakeNews.

Both the New York Times & CNN updated their stories to reflect the Patriots tweet, but they both heavily downplayed the fact that they were caught in a politically-charged lie.

Look how the New York Times downplayed their #FakeNews:

While Eleanor Mueller updated her “news story” with the Patriots tweet (cached story here), the update is not explained and it is clearly buried. The headline is exactly the same, as is the implication that the New England Patriots took a pass on visiting the White House, a complete fabrication.