Category
Global Markets
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Japan's Stock Market Plunges as Export Disruption Threatens Global Supply Chain
Japan's stock market fell the most in two years yesterday (Monday) in the aftermath of Friday's devastating earthquake, the biggest in Japanese history. Rolling blackouts and factory damage threatened exports for some of the country's biggest companies, many of which play a key role in industries' global supply chain.
The Nikkei 225 stock index closed down 6.2% yesterday at 9,620.49, after falling 1.7% Friday.
"The market is pricing in a better understanding of the enormity and complexity of the two natural disasters that struck Japan," Mohamed El-Erian, chief executive officer at Pacific Investment Management Co., told Bloomberg News. "The immediate impact will be felt through lower global aggregate demand, disrupted supply chains and funds flows into Japan."
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What My Mother Taught Me About the Global M&A Market
When PPL Corp. (NYSE: PPL) agreed to buy British power distributor Central Networks from German owner E.On AG (PINK ADR: EONGY) last week, the $5.6 billion bid by the Allentown, Pa.-based utility highlighted a key advantage that U.S. firms have when it comes to corporate-takeover battles in the international arena: In most countries, the staff and customers of the target company prefer a U.S. suitor to those from most other nations.
How do I know this? Simple … my mother told me.
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Mideast Crisis Turns Attention to Saudi Arabia Oil Supply
Libya's political turmoil yesterday (Thursday) continued to rage near the country's important oil patch cities, as Col. Moammar Gadhafi's military fought to secure ports and refineries.
Libya's government tried to portray a sense of security to foreign reporters who toured the Zawiya Oil Refinery Co. yesterday, even as rebel forces remained in place throughout the surrounding city.
Rebels also infiltrated Brega, an oil port in eastern Libya, as government warplanes struck the site, according to the Associated Press.
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Mideast Crisis Update: Don't Count on the Saudi Oil Supply
As the autocratic rule that has dominated the Middle East for decades continues to unravel, volatility in the global oil markets continues to point toward one overriding concern: How can we maintain an oil-flow balance in the face of this escalating uncertainty?
Global oil prices spiked to their highest levels in more than two years on Friday because of worries that the unrest and resulting production curbs in Libya would spread to other oil-exporting countries.
Oil prices retreated a bit yesterday (Monday) in the aftermath of several developments that investors perceived as positive. In the first, reports said that Libyan protesters were allowing oil shipments to resume from certain parts of the country. And in the second, Khalid Al-Falih, the head of state-owned Saudi Aramco, said that that "all incremental needs" for extra oil have been met.
Of course, even with the Saudi oil supply pledge, these developments offer only a momentary respite in the Mideast crisis. Almost two-thirds of the world's known conventional oil supplies are located in the Middle East region. And the question that isn't being answered – or even asked – right now is this: Are oil supplies sustainable in the face of a longer-term crisis?
The answer to that question will leave you feeling less than sanguine.
<<BREAK HERE>>To understand why this crisis is worse than most believe, please read on… -
This Middle East Meltdown Will Send Oil to $300 a Barrel – and Pump Prices to $9.57 a Gallon
The unrest in the Middle East oil patch is roiling the global oil markets on an almost daily basis.
The events in Egypt, Libya, Saudi Arabia, Oman and other countries are also forcing us to ask that long-dreaded question: What happens if the countries throughout the Middle East region fall to radical governments?
The answer is both stunning and surprising.
In an absolute worst-case scenario – if the entire Middle East falls under radical control – we could be looking at $300-a-barrel oil and pump prices of $9.57 a gallon. Definitely a stunner.
Here's the surprise: Even such a worst-case outcome would not result in the end of Western civilization as we know it. In fact, you can hedge against such a meltdown – just follow the recommendations that we detail below.
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Mideast Crisis Update: Don't Count on the Saudi Oil Supply
As the autocratic rule that has dominated the Middle East for decades continues to unravel, volatility in the global oil markets continues to point toward one overriding concern: How can we maintain an oil-flow balance in the face of this escalating uncertainty?
Global oil prices spiked to their highest levels in more than two years on Friday because of worries that the unrest and resulting production curbs in Libya would spread to other oil-exporting countries.
Oil prices retreated a bit yesterday (Monday) in the aftermath of several developments that investors perceived as positive. In the first, reports said that Libyan protesters were allowing oil shipments to resume from certain parts of the country. And in the second, Khalid Al-Falih, the head of state-owned Saudi Aramco, said that that "all incremental needs" for extra oil have been met.
Of course, even with the Saudi oil supply pledge, these developments offer only a momentary respite in the Mideast crisis. Almost two-thirds of the world's known conventional oil supplies are located in the Middle East region. And the question that isn't being answered – or even asked – right now is this: Are oil supplies sustainable in the face of a longer-term crisis?
The answer to that question will leave you feeling less than sanguine.
To understand why this crisis is worse than most believe, please read on…
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Buy, Sell or Hold: The Libya Crisis and Record Oil Prices Will Ground United Continental Holdings Inc. (Nasdaq: UAL)
The growing Middle East unrest – and the impact that the turmoil and the resulting uncertainty is having on global oil prices – is clobbering the airline sector's bottom line. The crisis is far from over, and the implications of the higher fuel costs have not yet been fully discounted by the market.
The bottom line: It's time to sell United Continental Holdings Inc. (Nasdaq: UAL) – before it breaks down to new levels of weakness (**).
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The Middle East Crisis: Egypt, Libya and Triple-Digit Oil Prices
Given the events that we've seen in Egypt and elsewhere in recent weeks – as well as the developments we've seen in Libya in recent days – there's only one conclusion to reach.
We are right now looking at the prospect of significant and sustained instability in a region that's home to two-thirds of the world's known crude oil reserves.
The Middle East crisis – and the unsettling reality it represents – has already sent tremors through the international energy sector. Oil prices are on the march. And this is merely the beginning.
The problems will likely get much worse.
But forewarned is forearmed: Even if the Middle East crisis continues to escalate, we can predict how the global energy sector will be affected. In fact, if the crisis reaches the severity that I'm expecting, it will send the world's energy sector through three very predictable phases.
And each of those phases affords investors with very specific profit opportunities – if they know what to expect.
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Global Bond Market Outlook: Three Ways to Dodge the Looming Bear Market in U.S. Bonds
Put 100 investors in a room and most will tell you how worried they are that the still-bullish U.S. stock market is going to betray them for a third time in slightly more than a decade.
But I submit that it's the bonds that these folks are right now holding that should be the real focus of their concern – and for one very good reason: Most investors view the global bond market as a stodgy source of fixed income, when it's actually the largest, most complex and most sensitive capital market in the world today.
To discover the three best bond-related moves to make now, please read on…
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Oil Prices Surge to Two-Year High on Middle East Turmoil
Protests in the Middle East drove oil prices to a two-year high yesterday (Tuesday) as anti-government violence spread in Libya, threatening the nation's oil industry and raising the possibility the contagion could soon affect larger producers in the region.
Oil jumped more than $7 a barrel, breaching $98 for the April contract of West Texas Intermediate (WTI) crude on the New York Mercantile Exchange. Meanwhile, Brent crude climbed as much as 2.7% to $108.57 on the ICE Futures Europe Exchange.
"Oil is being bought on the risk that this contagion will spread through the Middle East," Jonathan Barratt, managing director of Commodity Broking Services in Sydney, told Bloomberg News by telephone. "This effect is a knee-jerk reaction to the fact that this could spread."
Libya is the latest chapter in a saga of unrest that began in Tunisia in January and has raced through North Africa and the Middle East in recent weeks.
Iran added to the tension in the region yesterday by entering two of its naval ships into Egypt's Suez Canal headed toward the Mediterranean. Israel considers the presence of Iranian warships sailing through the canal "a provocation," Foreign Ministry spokesman Yigal Palmor told Bloomberg.
Fears of massive disruptions in the market have oil traders on edge and the energy markets are now braced for an even sharper run-up, according to Dr. Kent Moors, a noted energy expert and editor of the Oil and Energy Investor.
"That traders do not regard this as a short-term problem is seen in the futures contract curve. We have an escalating and contango market, one in which each month further out has a higher price than earlier months," said Moors. "The volatility will now kick in big time, and that will further unnerve the trading environment."
Libya's importance as an oil producer is more symbolic than anything else.
