Monday, August 7, 2017

Markets Have Another All-Time Record Close, T+199 -- August 7, 2017

Officially, it's T+200, but my number is T+199.

S&P: on track to record four gains in five days. It did. Closes at all-time record high.

Dow 30: ninth consecutive record close; 10th consecutive day with trading gains day-over-day.

Nasdaq: star of the show all day long.

Soundbites on records: records based on fundamentals. Records based on earnings. 

WTI: CNBC talking head says OPEC might "cut the cut." Now, "everyone" seems to be saying that OPEC was unable to make any production cuts. Another talking head says OPEC might be saved by "Venezuela." I guess they forget that Venezuelan heavy oil = Canadian heavy oil. The talking head says to watch Venezuelan oil production/exports; maybe, maybe not. I would recommend watching Canadian oil. And OPEC heavy oil = Venezuelan heavy oil. Could OPEC be looking to beat Canada to the punch when/if Venezuela implodes? Might OPEC be thinking the same way as the analyst: someone (Canada or OPEC) has to replace Venezuelan heavy oil. The US summer driving season ends in a month or so. A strong argument can be made that the price of WTI will trend lower going forward.

Proof? Any proof that Canada might take up the Venezuelan slack. Yup. Here at the Oil & Gas Journal:
The number of active rigs drilling worldwide climbed by 69 month-over-month in July to average 2,041, according to Baker Hughes data. The count was up 629 year-over-year.

Canada provided most of the monthly rise, gaining 48 rigs in July compared with its June average to tally 198, an increase of 104 year-over-year. It marked the second straight month in which Canada led global gains, reflecting a better-than-expected seasonal ramp up in drilling while US rig count growth slowed.

The elevated Canadian count compared with a year ago prompted the Petroleum Services Association of Canada (PSAC) last week to lift its forecast for total wells drilled in the country during the year to 7,200 from 6,680.

PSAC now estimates 3,604 wells will be drilled during the year in Alberta, up from 1,900 in the original forecast. In British Columbia, it expects 580 wells will be drilled, up 300 from the original forecast.
Venezuela? Rig count edged up by one, now even with last year's number. Same link as above.

Avis: big miss on both top and bottom lines. Shares plunge 10% in after-hour trading. Guidance outlook not particularly good. Will talking heads mention the 800-lb gorilla in the room? Uber. The 750-lb gorilla? Lyft. My son-in-law is a great --- ah, the talking head just mentioned Uber -- example ... my son-in-law is a great example. Works for international company out of London, incorporated in Bermuda, US HQ in New York, major regional office in Atlanta and he travels all the time. He ground transportation preference: Uber. Both he and our daughter love Uber. In the "old" days he would have been a loyal Hertz customer. On their recent week-long trip to Chicago, the two of them, no rental; took Uber instead. 

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