OptionEye - Macro Outlook - Oct 16th

[ShelladyOptions]

Good morning. 

It is getting uglier by the minute. 

Ebola is the reason. Other global growth stories started the move but Ebola is the boogyman in the market. Watch the stocks everytime we have a report of another confirmed case or quarantine. 

Ag markets overnight were quiet. Corn down 1, beans up 1 and wheat down 1. 

Oil still coming off and I think it has futher to go. Currently it trades at $80.14 down $1.64. Gold trying to catch a bid at $1242.14 up .13 cents. 

The 10 year is at 2.01% having spiked lower yesterday to 1.87%! I think it goes to 1.65% now. 

The dollar is up .10 to 85.25. 

We get Initial Jobless and Industrial Production today. Hang on tight. 

[Nigel]

I agree on the Oil prices.  Just read that ND just had its largest production month ever...and we still can't export it and no plans to change the law in the near term.   

[Palouser]

Apparently we ARE exporting as the regulations are easily gotten around. Tankers leaving from Valdez and Galveston for S Korea.

One article.  http://www.nytimes.com/2014/10/08/business/energy-environment/reversing-the-flow-of-oil-.html

[Nigel]

I knew about this article previously....Any Oil company can not export if they wish to do so...but hopefully in the near future which would help drive prices further down.  I read a report that some companies involved in fracking would still be making profits at $50/barrel and are not worried about the recent downturn.  

[Palouser]

I think the issue is that some cannot continue to produce at that price level, therefore the downside is limited. Another issue is the backdrop is a faltering economy. Any improvement globally will cause oil demand to increase and developing countries will be thirsty. I do not believe low prices will be sustainable.

On the other hand, as long as political will is weak and little action is taken to improve economies then we'll continue to have weak economies. Congress is missing in action.