Business

Oil bounced a bit (on Saudi noise)... banks dropped (ahead of CCAR)... Healthcare ripped again (on a bill that appears to be DOA)... and stocks gave up hope in the last few minutes...

Authored by Tsvetana Paraskova via OilPrice.com,

OPEC’s production cut deal is unlikely to survive beyond its current deadline in March 2018, with the agreement seen falling apart towards the middle of next year, in which case a huge amount of extra oil would hit the market, Ian Reid, head of European oil and gas research at Macquarie, told CNBC on Thursday.

OPEC’s deal has not had the cartel’s desired effect on the markets, neither in terms of oil prices nor in drawing down the global glut.

Just this morning we reported that as the global equity research market wrestles with how it will comply with the EU's MiFID II regulations, in a new study McKinsey said that banks will have no choice but to fire a ton of equity research analysts who write a bunch of stuff that no one ever reads...which seems like a reasonable guess.

Wherever one looks there are disconnects... between bonds and stocks, between risk and uncertainty, between hope and reality. But, as former fund manager Richard Breslow notes, most critically, there is a divergence between data and Fed actions, and this time is different as central banks appear to have shifted into 'whatever it takes' to tighten policy from emergency levels mode. 

As Bloomberg's Richard Breslow writes,

Start buying oil.

That's not only this morning's recommendation by Dennis Gartman but, as this afternoon, also Citi's commodities team (led by OPEC's impressario Ed Morse) which moments ago issued a report according to which crude oil markets will not only bottom, but more importantly, "investors should position now for a potential V-shaped rebound in crude oil prices, as price risk seems asymmetrically skewed to the upside."

Do two wrongs make a right? But we digress...