Chillin' out till it needs to be funded
A typical risk off market which has already lost 40 points on the S&P last week and another 130 on the Dow midday on Tuesday means that now we are explaining why falling Crude prices are actually hurting the market even as the Euro’s moment of truth probably has more sympathisers with the new governments which will likely be blamed for any furthering of the Euro break up arguments. However, reest assured the Euro still looks like the best investment on the planet and right next to it is the ubiquitous commodity that has made it to 35% of power plants in the 2012 that is till now behind us, Natural Gas having become almost as common as Coal as Power plants including the Coal dependent Southern Co of Atlanta (SO:US)
The revolution from shale gas was supposed to hit supply bottlenecks for Natural Gas after the fuel hit a sub $2 per pound price earlier this year with nationwide warehousing capacity at its peak unable to take the surge in fuel demand. However, Nat Gas prices also remain inviting even as power plants have already reached their peak in terms of gas usage after changing power fuels at most plants such that less than 40% of US power is produced by Coal plants and an equally “hot” 35% of the capacity is now supplied by Gas.
Meanwhile even as Caterpillar reported a 73% increase in SAles to resource industries after its acquisition of Bucyrus, supply of Coal remains challenged globally and Coal itself despite its reduction in usage maintains a tight Demand Supply gap keeping pricing on its toes.
Dollar’s rise in the spring of may has corrected Gold to below $1600 and I am already buying Gold while Crude has a mile or two more to go. Meanwhile Disney has set aside its outcast Carter status with the Robert Downey jr starrer “The Avengers” grossing a $200 mln opening weekend. And while Amazon has become a dilly dallying volatile value on the NYSE, McDonalds reported a 7.3% growth in Comparable sales. Amazon scored a 40% growth in Sales in the quarter keeping pace with Apple’s $40 bln this quarter keeping faith in the recovery intact for most investing in US markets including global sovereign funds from China and others. US Sales remained firmly in lead at Amazon at $7.43 bln even as China accounted for nearly $8 bln or 20% of Apple’s sales without the iPad
Spain’s slow build up to bailout Dollars went bang on target with EUR 10 bln of the expected EUR 100 bln required likely for Bankia this week, while Goldman Sachs ( check it at zerohedge.com) is still looking for QE from the Fed in June ( probably to counterbalance the Dollar’s rise this month!!!) German production rose almost 3% today, twice the expected number, even as the media and the intellectuals look to push mario monti’s Growth compact call to Hollande as Merkel’s bete noire and France’s future role for championing the Euro and its constituents.