Business

Authored by Kevin Muir via The Macro Tourist blog,

Usually when CFTC data shows a big speculative position, it is easy to spot the corresponding mood amongst traders. For example, take the current situation with the Canadian dollar. There are record net speculative shorts, and that bias is obvious amongst hedge funds and other professional traders.

However, over the past few years, I have been puzzled by the building of a massive record net long speculative position in the WTI crude oil market.

In late April, the Venezuela opposition slammed attempts by the Maduro regime to liquidate some/all of the nation's gold in order to buy his crumbling regime some additional time with much needed liquidity.

Since 2009, royalty and streaming companies have gained 230% while gold and the TSX Venture have returned 50% and 1%, respectively.

Royalty and streaming companies are able to sign advantageous deals during poor market conditions, at times when equity investments become less accessible. Desperate times call for desperate measures. In the troughs of a bear market, issuers seeking development and production capital often times must sell away future production at a discount.

Having reached 17 year highs in March following the Trump Bump, The Conference Board's consumer confidence has slipped to its weakest since Feb as 'hope' fades...

Plans to buy homes, cars, and major appliances all fell in May to the lowest levels of the year.

As The Conference Board details...

Corporate profits are rolling over again.

Two years ago, corporations posted their first year negative profit growth since the Great Crisis. We had a bounce from those depressed levels, which suckered a lot of investors into believing that fundamentals were improving.

That period is now ended. Year over year profits are rolling over HARD.

Why does this matter? After all, corporate profits have rolled over several times in the last few years… and the markets kept blasting off to new highs.