Week of Jan 2 2015 Weekly Recap & The Week Ahead
“Only when the tide goes out do you discover who’s been swimming naked.” – Warren Buffett
1. Greek Politicians Failed to Elect a President — Greece snap election is scheduled in early 2015. Greece’s main stock market fell over 10% on the news, while the country’s 10-year bond yields spiked above 9%.
2. Japan Govt Approves $29 Billion Stimulus Spending — Reuters, Japan’s government authorized a ¥3.5T ($29B) stimulus package last Saturday aimed at boosting the country’s lagging regions and households with subsidies, merchandise vouchers and other steps. Japan’s economy contracted for two consecutive quarters after a sales tax increase in April. Coming on top of a recent $29B stimulus package, the plan will likely cut the overall effective corporate tax rate by 2.51 percentage points to 32.1% – confirming a pledge made by Abe in June to lower the corporate tax rate to below 30% in the coming years.
3. Oil Falls Further, With Prices Down 50% Since June — Brent crude plunged to its lowest level since May 15, 2009. Nymex crude also settled at its lowest value since May 2009, losing over 50% since it touched a 52-week high of $107.26 in June.
4. U.S. Bureau of Industry and Security Will Allow Companies to Sell Oil Condensate to Oversea Markets — BIS, the U.S. Bureau of Industry and Security said it will allow companies to sell oil condensate that has been processed through a basic distillation tower, giving them a green light for export without violating a four-decade-old-ban.
5. Chart of Oil Price vs. Rig Count from 1990 to Present — below is a chart of oil price vs rig count of Baker Hughes courtesy from FactSet. It shows that rig counts will continue to decline, but the impact on supply will likely take “weeks if not months” to be reflected in hard production figures.
Oil Price vs Rig Count
The week ahead — Economic data from Econoday.com:
