Week of Dec 2 2016 Weekly Recap & The Week Ahead
“Letting losses run is the most serious mistake made by most investors.” – William O’Neil
1. Trump Responds to Recount Efforts — the Clinton campaign is backing Green Party candidate Jill Stein’s efforts to take a fresh look at voting results, stating it planned be a participant in recounts in Wisconsin, Pennsylvania, and Michigan. President-elect Donald Trump called the decision a “scam” and “nothing would change,” claiming he won the popular vote as well as the electoral college if “the millions of people who voted illegally” were deducted.
2. Cyber Monday 2016 Looks to Break Records — U.S. online sales gained momentum on Cyber Monday and looked set to surpass initial expectations by hitting a record $3.39B, which would mark the nation’s largest online sales day in history.
3. OPEC Reaches Deal to Cut Oil Production — OPEC group has agreed to lower output by 1.2 million barrels a day to 32.5 million barrels per day. If OPEC can agree on a cut, it will be its first since 2008. The production deal will last six months, according to Iraqi Oil Minister Jabbar al-Luaibi. He hopes the accord will push prices to over $55 per barrel. However, such an outcome would spur U.S. shale companies to produce more, eventually adding more supply to global markets and weighing on oil prices again.
4. EU Plans €5B Defense Fund — the EU plans to boost its defense budget to its highest level in over a decade, setting up a €5B fund and sending a signal to Donald Trump that it intends to pay for its own security. “This is not about an EU army,” European Commission Vice President Jyrki Katainen said. “We face multiplying threats and we must act.”
5. Iran Threaten U.S. Extension of Sanctions Violates Nuclear Deal — threatening to retaliate, Iran has called the U.S. Senate’s vote to extend the Iran Sanctions Act (ISA) for another decade a violation of the 2015 deal with six major powers that curbed its nuclear program. ISA was first adopted in 1996 to punish investments in Iran’s energy industry and deter its pursuit of nuclear weapons.
6. BP Approves $9B “Mad Dog” Project, First in Gulf of Mexico Since 2010 Spill — BP is planning to press ahead with a major deep water project in the Gulf of Mexico – the latest evidence oil companies are tentatively wading back into big-ticket projects amid signs a two-year crude market slump is ending. BP said it reduced the cost of phase 2 development of Mad Dog – as the project is known – to $9B, compared with an initial $20B estimate in 2013.
7. S&P500 Broken-Out — the SPX has broken out to the upside after a nearly two-year consolidation (See chart below).
The week ahead — Economic data from Econoday.com:
