United States President Woodrow Wilson first proclaimed an Armistice Day for November 11, 1919 by saying, “To us in America, the reflections of Armistice Day will be filled with lots of pride in the heroism of those who died in the country’s service and with gratitude for the victory, both because of the thing from which it has freed us and because of the opportunity it has given America to show her sympathy with peace and justice in the councils of the nations.”
Featured Picture: “Veterans Memorial in McAllen, Texas” – by Elitist Czar, Flickr
To our Veterans: Thank You and we will never forget.
The VIX high over the last three months was 28.84 on Oct 11, 2018, corresponding to the initial drop in the SP 500. IS this time different? Are we out of the woods? This week, with the mid-term elections over, Investors are asking is it time to get back on the Bull Train.
This October sell-off was concern about future earnings growth. Earnings were good, but guidance tended to express the view that earnings may not be growing as fast in the future. The previous pull backs in August 2015 and January 2016, were both Chinese Growth fears and the Chinese fixed that issue as we did with economic stimulus.
The February 2018 pull back; investors just feared that we went to high to fast. When the April earnings came out and were yet again strong, the market continued the rally.
While earnings were positive, guidance was not. Look for Mark Guthner to offer up some hedging opportunities. We are not completely bearish here at The Options Edge, but we are concerned that the market might need to work out the real causes of the Oct 2018 pull back before we continue on our bullish march.
An important Economic indicator that we track is the Price of Oil. Last week the price of Oil dropped about 5% to 60.19 per barrel. The front end contracts may have fallen, but the back end contracts are rising. So is the Donald Trump soundbite of slowing demand “Fake News” to try to mess with OPEC. Could be.
According to Phil Phlyn of Fox Business News, the demand is stronger than ever, and he states “a bottom should be in soon” According to the EIA, he US averaged 20.7 million barrels per day, up by 4.0% from the same period last year. The EIA reported that U.S. crude oil refinery inputs averaged 16.4 million barrels per day during last week which was 9,000 barrels per day less than the previous week’s average. Refineries operated at 90.0% of their operable capacity last week. Gasoline production decreased last week, averaging 9.7 million barrels per day. Distillate fuel production decreased last week, averaging 5.0 million barrels per day.
Be on the look-out for a cold winter that will affect oil and natural gas prices.
Global Spotlight
Italian Banks Under Pressure. As Rome struggles to head off sanctions by the European Commission over its growing budget deficit, a huge cloud is hanging over the country’s debt-laden banks.
OPEC Ponders Its Next Move. U.S. sanctions on Iran are now in full force, but the White House did agree to a handful of waivers for China, India, South Korea, Italy, Greece, Taiwan, Japan and Turkey.
Dim Prospects for U.S.-China Dialogue. U.S. President Donald Trump has been trying to put a positive spin on his upcoming dialogue with Chinese President Xi Jinping, including falsely claiming that he got Beijing to ditch its Made in China 2025 initiative.
Midterm Implications. A U.S. Congress divided between a Democratic-led House of Representatives and a Republican-led Senate points to more gridlock ahead.
A Potential Provocation Over Taiwan. Taipei is mulling granting the U.S. Navy access to Taiping [LINK: U.S., Taiwan: Washington Ponders a Military Presence on a Taiwanese Island], the largest island in the South China Sea.
Referendum Battles in Mexico. Mexico’s President-elect Andres Manuel Lopez Obrador’s legally dubious referendum on Mexico City airport construction was a big populist stunt, but his rivals are now using the same tactic against him.
Eritrea Set for Sanctions Relief. Following a surprise U.S. policy shift, the United Nations Security Council will vote on the removal of Eritrean sanctions on Nov. 14.
Stratfor.com
Economic Calendar
Here isa a list of the U.S. economic events happening this week.
Briefing.com
Review Last weeks numbers here.
Earnings
Thomson Reuters I/B/E/S
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