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Daily Blog

Thursday, April 19, 2018
The shale oil and gas revolution has made energy cheaper for U.S. manufacturers and spawned many high paying jobs. The recent drop in oil prices has caused the energy sector to cut back.

Oil prices reached $69/barrel and look poised to climb higher. Word on the street is that Saudi officials are targeting $80 or even $100 per barrel. Well, duh. Of course, they want higher prices. They have large fiscal deficits that need to be paid. However, they should be careful what they wish for. Higher prices will further stimulate supply from the U.S. shale producers who are already producing record levels and expected to double their output by 2023. Unfortunately, shale producers are currently running into a traffic jam - insufficient pipelines to move all of the oil they produce. In addition, workers are getting hard to find. However, higher prices will allow them to devote more resources to address these issues. OPEC is no longer calling all the shots. Please follow oil rig count on page 76 of the Global Perspectives Book.
Watch Karyn Cavanaugh's latest appearance on CNBC's Squawk Box as she discusses tax cuts and economic growth.

Weekly Commentary & Statistics

Monday, April 16, 2018

Heavy news flow drove a volatile week but stocks posted decent gains. Middle East tensions boosted oil prices and gold gained luster on signs of inflation.

Monthly Commentary & Outlook

April 2018

Growth across the board in employment, manufacturing and business confidence either notched near or surpassed record highs.

  • Economic growth was unleashed in the first quarter – in the United States, China and Europe
  • Markets also were unleashed and volatility spiked on fears of inflation, tariffs and technology companies
  • Tax cuts are a game changer which is not fully priced into corporate earnings
  • Geopolitical risk has fallen with saber rattling replaced by a surge in diplomacy
  • Global diversification is working with seemingly riskier assets ending the first quarter positively

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