Written by Gary
U.S. rig count ticks higher as prices collapse (SPY +0.8%). Goldman puzzled as options price in market shock similar to 1987 crash, GFC and COVID crisis.
The Market in Perspective
| Here are the headlines moving the markets. | |
 | Worlds Biggest Wealth Fund Wants Oil Firms To Cut More EmissionsThe worlds largest sovereign wealth fund, Norways $1.4 trillion Government Pension Fund Global (GPFG), should ask from the companies it is invested in when it comes to reaching their 2050 net-zero emissions goals, a government panel said this week. The fund said that oil firms in its portfolio need to cut their emissions more drastically. Norway is one of Europes richest countries thanks to the decades of oil revenues amassed in the worlds largestsovereign wealth fundwith US$1.4 trillion in assets and holdings |
| The Oil Price Collapse ContinuesAs uncertainty over new Covid outbreaks combined with a strengthening U.S. dollar, oil prices came under pressure this week and are on course to finish the week 7 percent down.Friday, August 20th, 2021Oil prices continued their downward slide on Friday, bringing the total weekly decline to 7%. With COVID fears still running high, crude also felt the pinch from the U.S. dollar strengthening as the Federal Reserve mooted cuts to its stimulus measures this year. ICE Brent fell below $66 per barrel on Friday morning, with WTI prices dropping to $63 |
| U.S. Rig Count Ticks Higher Amid Oil Price SlideThe number of oil and gas rigs in the United States rose by 3 this week, according toBaker Hughesafter rising by 9 last week. The total rig count is now 503, up 249 from the same time last yearthe highest rig count since April 2020, but still down sharply from the 790 active rigs in March 2020. The U.S. oil rig count rose by 8 this week to 405, while the number of gas rigs fell by 5. Miscellaneous rigs held at zero. The EIAs estimate for oil production in the United States for the week ending August 13 rose by 100,000 |
| Kurdistan Plans To Scrap Natural Gas ContractsThe Kurdistan Regional Government has notified Genel Energy of its intention to terminate the production sharing contracts for two natural gas projects, the London-listed oil and gas firm said on Friday. Genel has received notice from the Ministry of Natural Resources of the Kurdistan Regional Government of its intention to terminate the Bina Bawi and Miran PSCs, the company said in a statement. Genel believes that the KRG has no grounds for issuing its notices of intention to terminate, said the firm, which has had to wait for months |
| U.S. Large-Scale Battery Storage Capacity Is BoomingLarge-scale battery power capacity in the United States jumped by 35 percent last year to reach 1,650 megawatts (MW), and the significant growth of the past few years is set to continue, the Energy Information Administration (EIA) said in a report this week. U.S. large-scale battery capacity has tripled over the past five years, the report showed. The exponential growth is set to continue over the next few yearsas per EIA estimates, utilities have reported plans to install over 10,000 MW of additional large-scale battery power capacity in |
| The Worlds Newest Oil Countries Are Racing To Exploit ReservesThe new kids on the oil blockGuyana, Suriname, and Ghanahave no plans to let their newly discovered oil wealth go to waste by joining global decarbonization efforts. They plan to exploit them as best as they can before they become worthless, Reuters has reported, citing statements by government officials made at this week’s Offshore Technology Conference in Houston. Billions of barrels of crude oil have been discovered in the Guyana-Suriname Basin offshore the two South American neighbors as well as in Ghana in recent years. “We have |
| Top talent departs Jeff Bezos’ Blue Origin as NASA lander fight escalatesBlue Origin has lost a number of key leaders and engineers this summer, CNBC has learned, with most leaving in the weeks after founder Jeff Bezos’ spaceflight. |
| Concrete and cement industries brace for demand boom from $1 trillion infrastructure planDemand for concrete appears to have only increased after Congress passed the $1 trillion infrastructure package to upgrade America’s roads, bridges and tunnels. |
| U.S. government received 4,176 complaints ” and one compliment ” about airline travel in JuneAir travelers’ complaints to the U.S. government jumped nearly 18% in June from a month earlier as flight cancellations and other disruptions rose, the DOT said. |
| Family issues, racism compounded stress on Filipino-American college students during the pandemicFilipino-American college students suffered anxiety and depression during Covid as they struggled with family issues, racism and isolation amid the pandemic. |
| Watch live: Biden addresses evacuation of Americans and Afghan allies from KabulThe remarks, scheduled for 1:00 pm ET, will be the president’s second public address on the crisis in Afghanistan in less than a week. |
| Washington state Covid transmissions and hospitalizations hit all-time highThe delta variant now makes up 98% of cases in the state. |
| Dr. Scott Gottlieb says vaccinated people cannot ‘throw caution to the wind’ due to delta variant“You can’t just throw caution to the wind. You can still become a vehicle for spread in your community,” Dr. Scott Gottlieb told CNBC on Friday. |
| Delta variant sparks renewed interest in college tuition insuranceThe possibility of campus closures due to the delta variant has sparked renewed interest in college refund policies and tuition insurance. |
| ‘Jeopardy!’ producer Mike Richards steps down as incoming host after controversial past commentsMike Richards has stepped down as the host of “Jeopardy!” |
| Why your smartphone will be the next must-have barbecue grill accessoryGrilling is booming, and manufacturers like Weber and Traeger are leaning into connected technologies so expert and novice at-home cooks can make better food. |
| The SEC, and ESG advocates, want to know how well companies are treating their workersA new SEC effort and ESG momentum may push companies to view frontline and low-wage workers as material to financial performance and risk in a new way. |
| Topps SPAC merger with Mudrick Capital dies because MLB killed 70-year-old trading card dealTopps had been the trading card partner of Major League Baseball since 1952. Its SPAC merger with Mudrick Capital just blew up. |
| Foot Locker shares soar on huge earnings beat and on retailer’s optimism for 2HFoot Locker crushed fiscal second-quarter earnings estimates and voiced optimism about the back half of the year. |
| Op-Ex Panic-Bid Rescues Global Stocks From Worst Week In 6 Months As Fed Taper LoomsOp-Ex Panic-Bid Rescues Global Stocks From Worst Week In 6 Months As Fed Taper Looms Not a good week in the real world – Bad retail sales data, slumping consumer and business confidence, COVID cases surging (but not deaths), Delta fearmongering max’d out, oh, and US lost a war… Global economic data is disappointing at its fastest pace since the COVID lockdowns began…
Source: Bloomberg S&P 500, Dow were on track for their worst week in 2 months on recovery and taper fears until today’s idiotic meltup (which had the stench of gamma squeeze written all over it). Small Caps literally exploded higher from down around 1% in the pre-market to up almost 2%… |
| Goldman Puzzled As Options Price In Market Shock Similar To 1987 Crash, GFC And Covid CrisisGoldman Puzzled As Options Price In Market Shock Similar To 1987 Crash, GFC And Covid Crisis There is something bizarre about this relentless rally, where even a 2% dip is immediately bought. While it may seem like distant history now that the S&P is back near all-time highs, the equity sell-off earlier this week pushed the VIX above 20 (19 at last check), but while implied volatility suggests one thing, realized vol says something totally different and even inclusive of this week the past month has had preciously little volatility. As Goldman’s derivatives strategist Rocky Fishman observes, 7.8% SPX one-month realized vol is just 10th percentile compared with the last 50 years.
What this means is that so far in 2021, it has be an extremely “difficult environment” for hedging because in addition to elevated vol risk premium with implied stuck consistently higher above realized, Goldman has calculated that on every day since October the S&P has closed higher than its level from two months earlier – the 4th longest such streak ever … |
| Mainstream Media Finally Gives A Platform To Scientists Speaking Out Against Biden’s Push For Booster JabsMainstream Media Finally Gives A Platform To Scientists Speaking Out Against Biden’s Push For Booster Jabs At this point, it probably shouldn’t come as a surprise that the Biden Administration plan to provide COVID-19 booster shots before the FDA even has a chance to sign off isn’t actually based on any actual “science”. And some of the mainstream scientists are starting to speak up about it, opening themselves up to the possibility that their posts might be purged by Big Tech “misinformation” censors. Just as new data show that young people are at heightened risk for rare side effects like heart inflammation (with the Moderna jab carrying a higher risk), scientists are claiming that the push for boosters represents a rush to judgment, since it’s still unclear whether the waning protection against ‘breakthrough’ infection also leaves patients more vulnerable to severe illness. While one might be tempted to assume that more infections means more hospitalizations and deaths, ‘breakthrough’ infections tend to be far milder, and only the most vulnerable patients are likely to be impacted severely. Almost as surprisingly, a report about scientists’ objections was published by Reuters, a mainstream media organization with a massive reach. |
| SEC Busts $3 Million Insider Trading Ring By Former Netflix EmployeesSEC Busts $3 Million Insider Trading Ring By Former Netflix Employees The SEC busted a multi-million dollar insider trading ring at Netflix, the agency said in a new press release this week. The regulator charged three former Netflix employees with making over $3 million after having access to the company’s confidential subscriber information leading into earnings announcements. Sung Mo “Jay” Jun was sued by the SEC for being “at the center of a long-running scheme to illegally trade on non-public information concerning the growth in Netflix’s subscriber base,” the release says. The SEC said that while he worked at Netflix from 2016 to 2017, he tipped off material non-public information to his brother Joon Mo Jun and his close friend Junwoo Chon. After leaving Netflix in 2017, Jun also allegedly continued to receive confidential information from another company insider. He also traded on that information, the complaint says. “The SEC alleges that Sung Mo Jun’s former Netflix colleague Jae Hyeon Bae, another Netflix engineer, tipped Joon Jun based on Netflix’s subscriber growth information in advance of Netflix’s July 2019 earnings announcement. Sung Mo Jun, Joon Jun, and Chon allegedly used encrypted messaging applications to discuss their trading in an attempt to evade detection,” the release says. |
| Nvidia’s takeover of Arm raises serious concerns, says watchdogThe UK competition watchdog mounts an in-depth probe into US firm Nvidia’s proposed £29bn takeover of Arm. |
| M&S says recovery plan boosting sales and profitsThe High Street giant’s shares soar on upbeat trading news, as official figures show UK retail sales sank in July. |
| Apple delays recalling staff to the office until 2022The decision comes as fears grow over the impact of surging Covid cases in the US. |
| Future of Cryptos in India: A blanket ban or birth of a new age asset class?An inter-ministerial panel on cryptocurrency, under the secretary (economic affairs), had studies issues around virtual currencies and proposed specific actions in its report. |
| Sebi puts Adani Wilmar’s Rs 4,500 cr IPO on hold over pending probeUnder SEBI rules, a related entity of a company under investigation by the regulator cannot get approval for an IPO for 90 days, which can be extended by another 45 days. |
| RBI MPC member says easy money today can lead to higher rates tomorrowProfessor Jayanth Varma was the only detractor among the six members of the Reserve Bank of India’s rate-setting panel and marked the first sign of fissure in the panel on monetary policy since the beginning of the pandemic. |
| Documentary Of The Week: John Maynard Keynes – Life, Ideas, LegacyWritten by John Lounsbury This week we have an excellent documentary film created nearly 35 years ago by Professor Mark Blaug, (1927-2011). The documentary presents a thorough review of Keynes by fans and critics. Presented in the film are interviews with Keynes biographer Robert Skidelsky, Friedrich Hayek, and Milton Friedman, among many others.
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| Bond Report: Long-dated Treasury yields post biggest weekly drops since July as growth worries pile upTreasury yields turned mixed Friday, with long-dated rates lower on the week, as worries over the economic growth outlook weighed on markets. |
| Market Extra: Can empty offices become affordable housing? New legislation seeks to tryThe Revitalizing Downtowns Act would create the Qualified Office Conversion Tax Credit to help convert unused office buildings into residential, commercial and retail properties. |
| Market Snapshot: Nasdaq leads rally Friday but stocks are still heading for a weekly lossU.S. stock indexes climb higher Friday as investors troll for opportunities in a volatile week that has been framed by fears over the coronavirus delta variant, the imminent tapering of Federal Reserve bond buying, and China’s restrictions on its economy. |
Summary of Economic Releases this Week
Earnings Summary for Today
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