Two major items to discuss this morning.
1. Saudi Arabia announced they’d cut production by 328,000 barrels in September to a total of 9.36 million barrels.
2. Caterpillar smashed analysts expectations.
Out of all the Dow 30 companies, an index that the venerable DAN NATHAN from Fast Money hates and despises, no company embodies the global growth narrative better than CAT. This earnings beat, this great chant, is an affirmation of the spectacular condition of global trade. Much to the amusement of myself and many others, The House of Saud has cut production, something the wild eyed conspiracy theorists said wouldn’t happen.
So let’s connect the dots, shall we?
Apple, producer of high quality premium products, annihilated estimates, solidifying the notion that money is still out there to be had, for quality products. Caterpillar crushed the skulls of those betting against the China story. Employment data is robust and US GDP is tracking 3% per annum.
But let’s talk about another important factor, something that isn’t being readily discussed.
Cheap oil.
What does it mean?
Well, if you compare today’s prices to those on July 4th, the US consumer is saving $160 million PER DAY. If prices stay at these levels for the next 12 months, it is estimated that US consumers will save an astounding $100 billion.
Now you and I both know people aren’t going to save those dollars. We can very well be setting up for the best holiday shopping season in a decade. Considering the fact that many retail stocks are in the gutter, it might be time to revisit some old names and position for grande eloquence this X-mas season.
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Rates, copper, and oil all need to go up to reaffirm this idea, but I agree that this is the idea that will push stocks higher not only now but also after the next drawdown.
1) Other OPEC members will, and likely are already, increasing production as the Arabians cut because their budgets are much more fragile – oil may have more downside.
2) Republicans may take the senate.
That picture of Jack Ma is hilarious.
He is a billionaire and I am not. That is not hilarious.
Picture somehow reminds me of the Green Goblin in Spiderman movie.
judging by the shape of his head..I would say Jack Ma brain has to be AB NORMAL (no marty feldman) thus leading to his success with BABA
Damn I knew yesterday was better for the AMZN puts, they’re expensive today.
Nice work on Dan Nathan and Jack Ma. With your rapier like wit, Fly, I would imagine you get challenged to the odd street fight?
I never get challenged (Van Damm Voice).
The volume on CAT is surprisingly sparse too, for such a big earnings jump, weird.
just stepped on my puppy who lives under my feet. she ran out of my office saying
YELP YELP YELP
That Dan Nathan guy has been a bear since 2010, his returns must be horrible. Last night Adami “gave him kudos” for always being right, what a joke.
Michael Kors is the pick for me.
A trader I follow on Twitter just claimed steak he had at SW at Wynn, LV was best he’d ever eaten. Across the street from Encore and iBankCoin conference.