friday wrap
market vibes
May 9…)
“It’s not true I had nothing on. I had the radio on.” Marylin Monroe 1952, Time Magzine
On Sunday evening, May 4, the greenback crashed in Taiwan. Gold shot higher to close on the highs in New York on Monday. Bonds fell. Oil dropped $2.50/barrel. Stocks hesitated at the top of a three-week rally and settled unchanged for the next four sessions.
On Tuesday, tensions ran high. Gold extended what was, at settlement Tuesday evening, a two-day $200 rally. Markets were edgy, not panicky. And then an announcement Tuesday evening: the mood of the world downshifted overnight. Bessent would be meeting with his senior counterpart from China to discuss tariffs in Geneva.
Wednesday and Thursday were busy days. Gold fell, and the dollar rallied. On Thursday, Trump announced a very respectable deal with the UK in the Oval Office. One would have thought, “This is good.” But the markets reacted with ambivalence and uncertainty. Gold rallied, the dollar fell. Stocks clung to unchanged all day. By Friday afternoon, the closing bell at 4:00 PM couldn’t come soon enough.
In the markets
Oil rallied 10% low to high this week. Pundits said oil was higher becuase tariff deals were progressing. Diamondback and Conoco said they planned to cut production if crude prices stay below $60 concurrently with rallies on the days they posted statements on the wires so, there was that.
A well connected trader said China was buying Russian and Iranian crude which seemed to fit as well. The buying originated in London at 1:00 AM EDT and ended when London closed arounf 11:00 AM on both days.
Technically, WTI is not oversold or overbought. Open interest rose a very modest 30,000 lots. My view remains unchanged. OPEC and Russia are going to increase production, as will other OPEC producers, Canada, and major oil companies.
July WTI finished week over week: +3.4% at $60.49.
More charts and thoughts on oil and how natty might be the real trade in energy. Stocks of course… and bitcoin and gold way over their skis … coming up.
