Futures Sunday Night Suggest A Fairly Nice Opening Monday; Look At The Jump In Japan's Core Machinery Orders -- March 13, 2016

Updates

March 14, 2016: that was fun while it lasted. Apparently cooler heads prevailed and futures went negative late last evening and now we're looking at a negative opening. As I said, I'm eternally optimistic, inappropriately exuberant. Maybe it was that talk about Buffett bubbles.
 

Original Post

 

I think I recall that the Dow rose 218 points Friday. Pretty good day, whatever it was. And that followed a week of similar gains --- perhaps not that great but one gets the point, whatever.

I say all that to say this: the futures right now are showing an opening of 181 points. That follows an earlier story that "Asian stocks lifted by Wall Street gains, firming oil."

This is not an investment site. Do not make any investment, financial, or travel plans based on what you read here or think you might have read here. I was simply pointing that out. I was quite surprised to see futures where they are considering market action Friday. But I'm easily surprised. And an eternal optimist. And inappropriately exuberant about the Bakken.

Speaking of which, what did you think of that article about increasing clusters to "an unheard of density"? I can't imagine it costs all that much more to decrease cluster spacing.

By the way, there is another story out there with Warren Buffett explaining why market bubbles occur.

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Oil Price Rise Could Lead To More Production

Over at The Wall Street Journal now, which I assume is in tomorrow's edition:  Oil Price Rise Could Be Its Own Undoing.

Higher crude-oil prices could encourage shale producers to ramp up output again The slide in oil prices has paused after crude fell more than 70% from its 2014 peak. Now the question is whether the recent rise itself could spark another downward spiral.

U.S. oil prices are up more than 45% from a 13-year low in February, boosted by talks among Saudi Arabia, Russia and other major producers about capping their output.

A temporary reduction in global crude supply following outages in Nigeria and Iraq also helped buoy the market.

On Friday, the International Energy Agency said that oil prices may have bottomed out, and it forecast U.S. output to decline by nearly 530,000 barrels a day this year. The report seemed to support the market’s increasingly bullish mood, pushing U.S. oil prices up 1.7% to $38.50 a barrel.

But this rally could lead to its own demise, many analysts warn. Higher prices will likely encourage shale producers to ramp up output again, muddying any forecasts for shrinking U.S. supply.

Shale wells can be drilled and fracked within a matter of months, much more quickly than other types of oil wells that can take years to complete.

And there are about 1,000 Bakken wells already drilled, just waiting to be fracked. And thousands more with production being cut back.

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Big News Monday

This was back on December 8, 2015:

Japan October core machinery orders jump in good sign for capex.

Japan's core machinery orders unexpectedly rose 10.7 percent in October, posting a second straight month of gains, government data showed on Wednesday, in a sign of a delayed pickup in business investment.

The rise in core orders, a highly volatile data series regarded as an indicator of capital spending in the coming six to nine months, compared with economists' median estimate of a 1.5 percent drop in a Reuters poll.

That followed a 7.5 percent gain in September, which was the first month-on-month increase in four months. 

I posted all that "old news" because tomorrow it's going to be reported that Japan's January core machinery orders jump 15% -- maybe that's why futures are now up 197 points.

Here's that Japanese report: core machinery orders jump 15%; better than a 2.7% increased expected by economists. 

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The Sports Page

We lived in San Antonio for thirteen years and the Spurs are still among my favorite sports teams, regardless of sport.

It's still the same old team. Literally. From The Wall Street Journal:

San Antonio Spurs coach Gregg Popovich has become famous for resting his players during the regular season. The Spurs routinely allow their veteran starters to sit out games or spend long stretches on the bench in an effort to keep them fresh for the postseason.

But when they do take the court, the Spurs don’t let their aging stars idle. In fact, they race around the court like a bunch of eight-year-olds on a sugar high.

The Spurs, who have the oldest roster in the NBA with an average age of 31.3, play at one of the fastest paces of any team in the league. Entering the weekend, the Spurs ranked sixth in distance covered per game (17.4 miles), second in offensive distance covered per game (9.68 miles) and third in average speed (4.33 miles per hour).
Should the team’s averages hold, they will be the only team to rank in the top six in all three categories for the third consecutive season.

Playing at a frantic pace has made the Spurs one of the league’s most successful teams. They are 56-10 and on course to finish with one of the best regular-season records in history. But it hasn’t been a winning strategy for everyone. The Orlando Magic and Philadelphia 76ers, who rank in the top two in distance covered per contest, have a combined record of 37-94.

Having said all that, the Spurs won't make it to the NBA Finals. They will come up one game short. Sad. But the Spurs fans will still be among the best fans out there.