***Official*** 2015 Stock Market Thread

[Imp]

But wouldn't it be nice if it just popped to $50 for no reason -- supply issue still not addressed, storage on land and at sea nearing capacity --like it's done a few times over the past year?

In other news, CAD tanked again... I'm now up 14% on the year -- not so pretty after the huge inflation caused by the CAD tanking relative to USD.

Edit: So much for preferred stocks being less volatile. CPD (Canadian market) is a preferred ETF, I own a very small amount in a retirement account. It's now CA$ 12 -- started the year around $16. Distribution has been trending lower too. Good thing I didn't listen to someone, not here, who was talking about what a great deal it was back at $13 or $14 -- the guy also pumps Canadian REITs. Who would have guessed a preferred stock ETF based on Canadian companies in a tanking Canadian economy would tank...

 

[FelixDeCat]

Oil is going to the 20's :'(

 

[rcpratt]

Natural Gas just cleared the low set in April 2012. $1.89/Mbtu.

 

[Udgnim]

Oil is going to the 20's :'(

the faster it gets there, the quicker we get to the process for oil recovery to begin

 

[11thHour]

Oil is going to the 20's :'(

I hope so!

 

[11thHour]

the faster it gets there, the quicker we get to the process for oil recovery to begin

Once they start legitimizing oil prices that are extremely low, such as 'anticipation for arctic drilling', yada yada...then you know it's time to buy. They did the same when it was >$100, claiming 'peak oil'. There's also no reason for oil to start tanking quickly now since its already pretty low, and that's another sign of a buying opportunity.

 

[Imp]

Oil is going to the 20's :'(

Big money! Read something last week about how the game is completely different now because of horizontal drilling technology. Wells used to vertical only or something, so rig counts actually meant something?

In other news, POT for Potash is down to CA$ 23 or about US$ 17. Trailing year dividend is about 8.7%. If this were last year, I'd be buying... But if you go back a year, you'll see my posts about COS that had a 10+% dividend. How'd that work out? The company is a target of a hostile takeover, they appear to be hemorrhaging money, dividend is now nearly non-existent, and stock price is one takeover bid withdrawal away from losing 50%.

My money's on POT cutting its dividend, which will tank the stock further. Commodity prices suck.

 

[Imp]

It's almost Wednesday! Fed hike or another "oh no we can't" that will send every index up 500 points?

 

[sm625]

Tomorrow is kind of a big day. I figured I would toss out my plans just for the hell of it. I expect SPY to hover around the 204.50 mark until the release. If this holds true I will buy some weekly 204 puts before 2pm. At the release I would expect an immediate leap up to 206.25 at least. At that point I will jump in with a much larger short position, again with weeklies. If it sells off before the release I will buy calls at around 202 and look to unload them into the ramp.

 

[Charmonium]

It's almost Wednesday! Fed hike or another "oh no we can't" that will send every index up 500 points?

As one commentator put it, this is probably most thoroughly telegraphed move the fed has ever made. Your chances of winning the lottery and being hit by a meteorite on the same day are probably higher.

 

[JTsyo]

Interest rate is up .25%. Finally they make the move.

 

[Imp]

Markets up a bit, no OMFGBBQ, but what happens over the next week should be more interesting. The job numbers a few weeks back slowly filtered in.

 

[jpiniero]

That they did .25-.5 is pretty surprising. I'm not sure what to make of that really.

 

[Imp]

What the hell is with the range?

I thought they only did 0 to 0.25 to sugarcoat zero. The analyses I read from months back said it would start at 0.40... I guess it's 0.40 now?

P.S. Hope this is what pops the bubble in Canada's housing market. It should only affect the 5 year fixed rate, but tons of people renew their mortgage day to day with a home ownership rate over 70% in a country of ~35 million and 163.7% debt to income ratio.

 

[Charmonium]

That's a little odd since the fed funds rate has been trading between .12 and .15% since the summer.

https://research.stlouisfed.org/fred2/series/DFF

edit: OK, that's a weighted average, not a raw number. It looks like the daily trading range is pretty big and has been as high as .38 recently.

https://apps.newyorkfed.org/markets/autorates/fed funds

 

[dullard]

What the hell is with the range?

I thought they only did 0 to 0.25 to sugarcoat zero. The analyses I read from months back said it would start at 0.40... I guess it's 0.40 now?

As far as I know it is always a target range. The fed doesn't directly control rates. The fed can't just type in 0.25% and have it be set there. They can't demand that banks set their rates to any value either. Instead, the fed has to do a lot of behind-the-scenes manipulations to guide the rates. These maneuvers are not perfect. Thus, there is target range of goal rates, not a specific exact rate. The actual rate varies daily.

 

[jpiniero]

P.S. Hope this is what pops the bubble in Canada's housing market. It should only affect the 5 year fixed rate, but tons of people renew their mortgage day to day with a home ownership rate over 70% in a country of ~35 million and 163.7% debt to income ratio.

I don't think it affects Canada... well actually won't it make the dollar stronger (which should only make oil cheaper)? They are also talking about lifting the oil export embargo (to try to save the frackers?) Not sure it's gonna work. But that's going to add more competition in other countries.

 

[JTsyo]

As far as I know it is always a target range. The fed doesn't directly control rates. The fed can't just type in 0.25% and have it be set there. They can't demand that banks set their rates to any value either. Instead, the fed has to do a lot of behind-the-scenes manipulations to guide the rates. These maneuvers are not perfect. Thus, there is target range of goal rates, not a specific exact rate. The actual rate varies daily.

I would imagine it varies by who is trying to borrow too.

 

[Imp]

As far as I know it is always a target range. The fed doesn't directly control rates. The fed can't just type in 0.25% and have it be set there. They can't demand that banks set their rates to any value either. Instead, the fed has to do a lot of behind-the-scenes manipulations to guide the rates. These maneuvers are not perfect. Thus, there is target range of goal rates, not a specific exact rate. The actual rate varies daily.

First and only explanation I've seen. Looks plausible.

I don't think it affects Canada... well actually won't it make the dollar stronger (which should only make oil cheaper)? They are also talking about lifting the oil export embargo (to try to save the frackers?) Not sure it's gonna work. But that's going to add more competition in other countries.

From what I've read, it affects Canada through mortgages because the longer-term fixed rate mortgages are set by Canadian bond rates, which are tied to US Treasuries.

On every other front, USD goes up, CAD goes down (twas about 0.75 USD/CAD a few weeks back, down to 0.725 today) unless Canada's central bank follows, and they've lowered the rate from 1.00% to 0.50% over the past year. Canada's economy is shit right now and has been for at least the past year since the oil crash -- it's felt like shit since 2008 just like everywhere else. Only thing propping it up is housing and like 25% of the economy is based on the construction and sale of property.

Supposedly, it makes manufacturing cheaper, but there's no way you can compete against Mexico with significantly lower living expenses, possibly zero heating related climate control expenses, and significantly lower standards of living -- same thing for all of Asia except multiply "significantly" by a couple times. I've also heard that some existing manufacturers pay for a lot of parts/goods in USD, so they're actually hurting -- some are doing better. Regardless, you can't just throw up a new factory in a year and probably wouldn't because some country's exchange rate is lower for now.

As for oil, looks like there's opposition to allowing crude exports in the U.S. Congress/Senate -- assuming Obummer doesn't veto. Not sure how that would help aside from flooding the already oversupplied global crude market. Speaking of, Iran is supposed to be dumping an extra 500k to a million barrels/day on the market about now.

 

[FelixDeCat]

I told you the rate hike was no bfd.

Now what do we worry about?


(Also, buy Solar. Paris declared fossil fuels dead and Congress renews tax credits for renewables).

 

[Imp]

I told you the rate hike was no bfd.

Now what do we worry about?

I didn't think so either... but OMFGBBQ END OF THE WORLD, YO -- if you look at the market, Fed, and all the "analysts" predicting the end over the past few months.

 

[Charmonium]

First and only explanation I've seen. Looks plausible. Quote: Originally Posted by jpiniero View Post I don't think it affects Canada... well actually won't it make the dollar stronger (which should only make oil cheaper)? They are also talking about lifting the oil export embargo (to try to save the frackers?) Not sure it's gonna work. But that's going to add more competition in other countries. From what I've read, it affects Canada through mortgages because the longer-term fixed rate mortgages are set by Canadian bond rates, which are tied to US Treasuries.

I didn't know that your bond rates were based on ours. That's weird. I'm sure there's a reason for it but it seems odd.

As far as the increase, since the fed funds rate was already trading well over the 0-.25 range, the fed hike was really over due. They have a fair amount of control over short maturities, much less as you go out to the long end.

I think the real issue with a hike is that it signals the fact that the fed will probably start to sell assets on their balance sheet and therefore shrinking the money supply as well as excess reserves.

 

[Imp]

I didn't know that your bond rates were based on ours. That's weird. I'm sure there's a reason for it but it seems odd.

I don't think it's a direct relationship, but it's probably to do with Canada's proximity to the U.S. and how the U.S. is its biggest trading partner.

Might also be that it's so easy to buy U.S. Treasuries in Canada -- I don't think I had to do anything extra to trade on U.S. markets and have no clue how to trade on any other foreign market. Essentially, why buy Canadian bonds for a crappier yield if U.S. Treasuries are a higher yield and so easy to buy?

Also, I think the statistic is that Canada's central bank has followed the U.S. Fed 90% of the time. Not this time though. It'll crash the housing market unless someone can explain how a country with average household incomes of ~$80k can afford average house prices of $450k. What's that? Debt is at 163.7% to income?

 

[Charmonium]

That's interesting. Thanks.

It sounds like you have a housing bubble. I just hope most of your mortgages aren't adjustable rate. You really don't want to go through what the US has. Not that Canada was unscathed of course but at least your banking system didn't virtually collapse.

 

[Imp]

Every "expert" in the world except for those in Canada with a vested interest in the Canadian housing industry seem to think so.

Edit: Forgot this from days ago. This is an amazing chart.

Here is a chart of west texas crude overlaid with a chart of the bloomberg commodities index. Do you see anything bullish at all on this chart?

http://stockcharts.com/h-sc/ui?s=%24WTIC&p=W&st=2000-06-24&en=200-06-24&id=p45477903322

What that chart tells me is that oil is 100% overpriced relative to all other commodities.